2016-03-21-CPC-ATM-rpt - Laserfiche WebLink

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Community Preservation Act The Community Preservation Act(CPA)is a state statute which individual communities in the Commonwealth may choose to adopt; Lexington adopted the statute by a vote of Town Meeting in 2005 and it was accepted by voters in 2006. CPA communities impose a surcharge on their own property taxes of up to 3%, and funds raised from the surcharge are restricted to use for projects in four categories: community housing, historic resources, open space and recreation. To support expenditures in these areas, the state "matches" the funds raised by the community surcharges annually at a certain percentage. Lexington elected a 3% surcharge on both residential and commercial taxpayers. Mindful of the burden on homeowners, however, the Town also adopted provisions which exempt the first $100,000 of home value from the surcharge and grant a total exemption from the surcharge to lower income residents. In FY16, the annual surcharge averaged $317 billed per Lexington household. Our commercial and industrial taxpayers were billed $853,332 in FY16, representing approximately 19% of our billed CPA surcharges. The state match is distributed annually, based on the prior year's surcharge receipts. The match was originally 100%, but has declined since 2006 as additional communities have adopted the statute and joined the funding pool, and as registry fees which feed the state fund have suffered in a weak economy. Despite the decrease in state matching funds, there are several encouraging measures being taken to ensure that the State Trust Fund benefits from both short and long-term growth strategies. Governor Baker's FY17 State Budget includes a recommendation to transfer $10 million in surplus funds to the CPA Trust Fund which would mark the fourth year in a row the state budget has included such a transfer to this fund. The FY16 state budget authorized the transfer of$10 million from the FY15 budget surplus to the CPA Trust Fund. $11.4 million was transferred to the fund from the FY14 budget surplus and $25 million was transferred from the FY13 budget surplus. Prior to the transfer of surplus funds, Lexington's FY13 state match totaled only $929,507. While yearly surplus transfers to the Trust Fund would benefit communities by providing immediate increases in state matching funds, relying on state budget surpluses cannot sustain the CPA as a long-term solution. A piece of legislation introduced in 2015 entitled An Act to Sustain Community Preservation Revenue calls for a review of the fees collected at the Registries of Deeds (the trust fund's primary source of funding). The current transaction fees have not been adjusted since the CPA was signed into law in 2000. The Department of Revenue's Monthly Report of Collections and Refunds released in October 2015 shows an 8.5%increase in collections at the Registries of Deeds compared to last year's figures but the bill seeks a more permanent solution. If passed, it would call upon the Department of Revenue to calculate the necessary fees that would allow for all CPA communities to receive a 50% match in their first round distribution. The bill received a favorable recommendation from the Joint Committee on Revenue in September 2015 and is currently before the House Committee on Ways and Means. 2