Cambridge City Manager Robert W. Healy on Friday submitted his proposal for a $183 million city budgety, and the first hearings on the proposal are slated for this week.

The spending figure represents a nominal increase of 6.8 percent from last year, without considering inflation's effects.

Healy said the city would make up a substantial loss in revenue from federal funding by offsetting increases in new state aid and the city's new hotel/motel tax, which was introduced last year. He said the budget will will maintain city services and programs at last year's levels.

In a written message accompanying the proposal, Healy said, "The budget, as proposed, recommends funding of operating programs at existing levels of service, while significantly increasing our capital outlay."

According to Healy, this year's budget will "continue to focus upon the city's efforts to improve the maintenance of our streets, sidewalks, parks, and public buildings." The proposal allocates over $17 million to a capital program for this purpose.

"I think [Healy] has put together an excellent budget," said City Councilor David E. Sullivan, a member of the liberal Cambridge Civic Association.

He said that it was generally a good proposal although he would have some questions about parts of the budget.

Independent City Councilor William H. Walsh said he thought that the budget needed a significant amount of streamlining.

"I think some trimming needs to be done," he said.

Walsh said he was concerned about duplication of services and with waste in contracting with outside companies.

One potentially controversial allotment is the $68,250 funding of a police review board, which was established after heated testimony of police racism and brutality a year and a half ago.

Members for the board have not been selected yet because of a shortage of qualified applicants, Healy said recently.

A liberal councilor who asked not to be named said it was likely that the review board's funding would be challenged.

Healy said that he thought that the budget was very equitable but that the school department received less funding than it had requested.

"I think the school committee would like some additional funding for new programs," he said.

The proposed education budget is $51.8 million, up from last year's $49.3 million. (see story this page)

The education allocation would be funded with half of the new state aid and $500,000 of hotel/motel tax revenues in addition to other sources.

In his message, Healy wrote that "Cambridge is currently enjoying unprecedented economic and financial good health."

Federal revenue sharing is expected to decrease by 67 percent to $500,000 and Community Development Block Grant funds are expected to decrease by 28 percent or almost $1 million.

With this in mind, he said, the budget proposes to increase the capital program to more than $17 million from $6.5 million.

To fund this increase, the budget recommends that the council pass a bond authorization of $9 million as the first phase in a five year program, The budget says that this is "made possible by the city's strong financial condition."