Gov. Edward J. King's announcement last week that he does not plan substantial increases in state aid to local cities and town was the latest blow to Cambridge officials facing massive layoffs and cutbacks as a result of Proposition 2 1/2.

King told the state legislature that he wants nearly a 7-per-cent hike in the state budget. Aid to local communities will go up less than 4 per cent, though--a figure one city official called a "sick joke," considering the 15 per cent dent Proposition 2 1/2 will put in tax revenues next year.

"The governor's budget projects only $37 million in new aid for cities and towns," Cambridge Mayor Francis H. Duehay '55 said yesterday. "And cities and towns stand to lose $550 million as a result of Proposition 2 1/2."

"King simply did not address the issues raised by 2 1/2," Duehay added, "He sidestepped the issue completely."

Duehay and other local officials attribute King's move to politics. "He does not want to be the one accused of initiating new state taxes. He wants to be pushed into it by people yelling and screaming. And there will be plenty," the mayor said.

That notion--that the governor is setting up a confrontation so he doesn't end up the fall guy if taxes are raised--seems to be the basis for a new flurry of attempts by local officials to gain relief.

The local leaders say they are willing to grant King political points if that means tax revenues. And they seem prepared to scream and yell, to act their part in the confrontation.

Cambridge city councilors have lately begun calling for massive protest demonstrations, for example, '"I'll go to court to block Proposition 2 1/2. And I'll lead a march on the State House," Cambridge city manager James L. Sullivan, who has been in the forefront of the anti-2 1/2 effort since the fall, added.

The protest and pressure strategy might force the legislature into granting more local aid or adopting large-scale tax reform. But even the noisiest critics of the referendum concede the chances for real relief in the six months left before the new fiscal year are slim.

A more likely outcome, they say, is that cities will indeed be forced to make massive layoffs and cutbacks; only in the wake of those actions will public opinion wrest relief or reform from Beacon Hill.

"An awful lot of legislators are saying they want to see some blood flowing," one councilor said recently. "The people have made their own bed and I'm not going to change the sheets until they scream goddam loud," a legislator added.

If that is their wish, they may get it soon. In Cambridge, for example, teachers' contracts stipulate that they must be told by April 15 if they will have their job another year. And without relief from the state by that date, some 200 of them may be getting the bad news.

And those layoffs are only the start. Since the passage of Proposition 2 1/2 in November, local officials have been grasping at straws and silver linings. So far, they've had no luck.