The cover of City Manager Robert W. Healy's proposed budget for the upcoming fiscal year says it all.

Gone are the panoramic full color cityscapes and majestic pictures of City Hall that graced the cover of budgets past.

In their place is a stark black and white picture of milk cartons, newspapers, glass and tin cans with one ominious, money-conscious word--"recycle"--scrawled across the cover.

The image is an appropriate one for the budget city officials unveiled yesterday, which emphasizes tight management and reduction of costs to help the city ride out the state's fiscal difficulties.

The budget contains a 4.9 percent increase in expenditures moving from $230 million to $247 million. Property taxes are expected to increase 6.8 percent from 109.5 million to $117 million.

The property tax increase is primarily due to cutbacks in in state aid to Massachusetts city and towns--the result of efforts by Gov. Michael S. Dukakis to close the state's ever-increasing budget deficit. To date, the city has lost $3.5 million in state aid, and city officials said they anticipate that figure to rise by at least $1 million over the course of the next year.

Louis A. DePasquale, the city's budget director, said this year's budget was "pretty tight" but added he was satisfied with the result.

"In difficult fiscal times the city has continued to provide services and programs," DePasquale said.

James Maloney, assistant city manager for fiscal affairs echoed DePasquale's enthusiasm.

"There are no cuts in this budget. Every department would like more money but this budget not only provides funds for essential services but also small improvements," Maloney said.

Deceptive Increase

Councillor Jonathan S. Myers said that the 4.9 percent spending increase in the budget was deceptive because the jump is due to a rise in city salaries.

"The budget represents a slight increase but there are a lot of built-in costs," Myers said. "Most departments are taking a two percent cut."

The two percent cutbacks arise from the fact that departments were told to budget a salary increase of 9 1/2 percent and then were only allowed to increase spending last year by 7 1/2 percent--effectively requiring each department to take a cut, DePasquale said.

But for all the dour news, Cambridge remains in a better situation to absorb the continuing cuts and the worsening economic situation than other Massachusetts communities, said city administrators.

"Every indication is that Cambridge is in much sounder fiscal situation than other municipalities," said Maloney.

Maloney said that the state's fiscal crisis and cutbacks in local aid have not affected Cambridge as quickly as other communities because the city is below the tax levy cap set 10 years ago by the statewide referendum known as Proposition 2 1/2. In addition, Maloney said the city has taken an "overall conservative fiscal approach" to the budget.

Despite the expected increase in property taxes, the city remains $8 million below its levy limit established by Proposition 2 1/2. Because of this excess levying capacity, which allows the city to respond to "unforeseen expenditures" and decreased local aid, city administrators do not expect the city to show major effects from the decreasing state aid until next year.

"We are probably as strong as any other municipality," said DePasquale.

Mixed Reactions

City Councillors, who will approve the budget during a series of hearings set to begin April 18, met the new budget with mixed reaction.

"With four new council members we are going to take the opportunity to take a long hard look at the budget," Myers said. "I don't envison major changes this year but we are going to look at each department...The changes will be made more so next year than this year," Myers said.

Vice-Mayor Kenneth E. Reeves '72 disagreed with Myers. Reeves said he "strongly predicts" that the city will see a increase in spending for the human services department during the budget hearings.

"I think there will be some changes, some significant changes," Reeves said.

Councillor William H. Walsh also said he would like to see changes in the budget, but not in quite the same way.

"It's too high. It needs to be trimmed," Walsh said. "I don't think the council is taking the budget crises seriously."

Objections to New Post

Along with Councillor Timothy J. Toomey, Jr., Walsh said he objected to the creation of a new post of police commissioner, which Healy added to the budget this year.

Walsh said he plans to use the hearings to understand why the budget will increase at all. Walsh said that he expected the hearings to be "active."

"It will be an interesting time, It will be lively," Walsh said.