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The Cambridge City Council unanimously voted Monday to raise property taxes by 7.3 percent on residential property and 10.1 percent on commercial property amid concerns about the sustainability of the city’s growing budget.

The overall tax increase is 9.21 percent, according to a report prepared by City Manager Yi-An Huang ’05 in advance of the meeting.

Huang said the tax increase was needed due to Cambridge’s rising budget and dwindling federal Covid-19 relief funds from the American Rescue Plan Act.

“This is the second year in a row that we have had a higher than average increase in the tax levy, which is driven by the growth in the city budget,” Huang said at the Monday meeting.

“Over the last couple of years, we have funded significant program expansion through both federal ARPA dollars and city budget growth,” he added.

The ballooning budget has recently been the subject of consternation among city leadership after reaching nearly $1 billion this year.

Huang said though the current situation is not dire, the city needs to tighten its belt in order to avoid significant cuts in the future.

“We are not in any sort of a fiscal crisis, but it will be very important for us to moderate our budget growth, prioritize our new investments and ensure that we can sustainably fund all of the programs that are making a difference in our community,” he said.

Huang also noted that Cambridge property rates remain lower than other nearby cities, such as Somerville, Boston, and Brookline.

Councilor Paul F. Toner said during the meeting that the city needs to slow budget growth because the steep tax increases are unsustainable.

“I know we all want to do many wonderful things for all of our residents, but going forward through the financial planning process, I think we're just going to have to tighten our belts,” Toner said. “Even though we have a very envious tax regime in the city, I don’t think people really love seeing the number 7 or 8 percent every year going up in taxes.”

Councilor Catherine “Cathie” Zusy specifically raised concerns about the city’s debt.

“What keeps me up at night,” she said, is that “10 percent of our budget is for debt service.”

“We’re paying 100 million for debt service now,” she added, stating that the city has now borrowed a total of $930 million.

But Councilor Sumbul Siddiqui expressed optimism with the city’s fiscal position, responding that the debt “doesn't keep me up at night.”

“Councilor, magnesium, it’s good,” she said, addressing Zusy. “Take that.”

Siddiqui said she hoped future conditions would improve, and that “in a few years, the lab market will pick up again” — referring to a regional downturn in commercial lab development.

Harvard professor Suzanne P. Blier, the president of the Cambridge Citizens Coalition, called the proposed tax increase “staggering” during the meeting’s public comment segment.

“This is really going to impact lower and middle income families in Cambridge and individuals and seniors on fixed income,” she said.

Vice Mayor Marc C. McGovern said that the Council should be prepared for resident backlash if it ends up having to make cuts to city programs.

“They’re going to say, ‘Please don’t do that. These are really important.’ And they’re going to put pressure on us,” McGovern said.

“It’s going to take a lot of discipline all around if we’re going to get a handle on this, and those are going to be even tougher conversations to come,” he added.

—Staff writer Benjamin Isaac can be reached at benjamin.isaac@thecrimson.com. Follow him on X @benjaminisaac_1.