2019-03-25-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 ratification by Lexington 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 fiscal year 2019 (FYI 9), the annual surcharge averaged $402.67 billed per Lexington household. Our commercial and industrial taxpayers were billed$946,685 in FYI 9, representing approximately 19.02% of our billed CPA surcharges. In its initial year, FY07, the surcharge brought in approximately$2.5 million, which was fully matched with state funds. Since FY07, annual revenue from the local surcharge has steadily increased. Latest figures are available for FYI 8, for which the surcharge raised $4,659,786. However, state matching funds, which come from a surcharge on Registry of Deeds transaction fees, have fallen since FY08. Lexington's FYI state match totaled $922,256 or 19.8% of its surcharge. This included a share of a $10 million distribution from the 2018 state budget surplus. Surplus funds are not always available, however, and the Trust Fund will likely continue to decline. The general decrease in state matching funds is due primarily to an increased number of communities passing CPA bylaws and competing for limited funds, and stagnant recording fees collected at the state's Registries of Deeds. The current transaction fees have not been adjusted since the CPA was signed into law in 2000. While Lexington's FY 19 state match(not including the $10 million surplus) is at an all-time low, CPA advocates believe this actually strengthens the argument for a permanent fix to the CPA Trust Fund. Recently reintroduced legislation entitled An Act to Preserve Community Preservation (S.1618 and K2463) calls for a review of the fees collected at the Registries of Deeds (the trust fund's primary source of funding). If passed, the increased fees would provide all current CPA communities with over a 40% first round distribution in 2020. The bill is now working its way through the legislative process, and the Governor of Massachusetts, Charlie Baker, has promised to sign it if it successfully passes both Houses. Given the increased number of CPA communities competing for limited funds and the uncertainty of future state budget surplus transfers and pending legislation, the Town projects a conservative 11.5% state match estimate for FY20. The chart below shows the state matching funds received to date. 2