Cambridge faces a substantial tax rise "almost no matter what the City Council does to the budget." City Manager James L. Sullivan told the council as hearings opened last night on next year's city budget.

Sullivan said he expects no increase in state aid this year, and added that the Commonwealth may charge the city as much as $500,000 more than this year to make up for the Massachusetts Bay Transportation Authority (MBTA) deficit.

Sullivan budget is below the 4-per-cent spending cap imposed by the state legislature on cities and towns.

Sullivan warned last night, however, that contract negotiation between the city and municipal employees who are demanding raises as high as 30 per cent, would probably send the budget above the reap. Two-thirds of the City Council must approve the budget if it exceeds the cap.

Assessments

State statistics indicate the value of Cambridge property increased $365 million last year, but assessments were not increased "because we wanted to keep them stable while we were on the route to 100-per-cent assessment." Sullivan said.

If property was reassessed, the tax rate in the city might actually decrease while the amount of money raised remained constant, Sullivan said.

At current assessments, the tax rate will jump as much as $50 just to keep pace with inflation, Sullivan predicted.

Councilor David Sullivan suggested reassessing property might also "smooth out some of the inequities" on the current tax structure by taxing more heavily those owners whose property increased in value.