Healy wrote in the report that the outlook for next fiscal year is "no better," noting that lack of state funding would lead to an estimated $3.4 million in the hospital's budgeted deficit.

"While the city is actively lobbying at the state level to gain support for the restoration of these funds, I am not optimistic about our chances for success," Healy wrote.

`Committee on Cats and Dogs'

Steven M. Wise, a member of the mayor's blue ribbon committee on the treatment of animals in Cambridge laboratories, and Gul Agha, founder of the Cambridge Committee for Responsible Research, submitted proposed ordinances to regulate animal care and use in laboratories to the council for consideration.

The Blue ribbon committee originally presented its report to the council at the February 27 meeting. Councillors commended them for their hard work but asked if the committee would continue to meet in order to draft specific suggestions for the council.

The council also held a hearing to discussing licensing of Cambridge taxicabs and the distinction between cabs and livery services. Walsh introduced a resolution asking the city manager to direct Chief of Police Anthony Paolillo to review why Boston taxis are picking up fares in Cambridge.

Walsh's order calls on the police chief to prepare a report "to detail on what is being done to curtail this practice and what plan he can enact to crack down and bring to an end this violation."

In other business, the Cambridge Citizens for Liveable Neighborhoods filed a petition with the council that would restrict the number and type of zoning variances granted Cambridge.

The petition asks for a new subsection to the Zoning Ordinance that would not permit variances to be issued in all residence and open space districts. If adopted, the change would make it more difficult for commerical establishments to be set up in residential areas.