2020-03-00-CPC-ATM-rpt - Laserfiche WebLink

Browse Search

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 2020 (FY20), the annual surcharge averaged $424.29 billed per Lexington household. Our commercial and industrial taxpayers were billed $997,439 in FY20, representing approximately 18.97% 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 9, for which the surcharge raised $4,911,223. However, state matching funds, which come from a surcharge on Registry of Deeds transaction fees, have fallen since FY08. Lexington's FY20 state match totaled $1,219,950 or 24.8% of its surcharge. This included a share of a $20 million distribution from the 2019 state budget surplus. Surplus funds are not always available. While higher than the initial estimate of 11.57%, the FY20 state match did not initially include the 2019 state budget surplus of $20 million dollars, as had been anticipated. The surplus funds were not included in the CPA Trust Fund payments that were distributed in November 2019 because of a delay in the State legislature's passage of the FYI budget closeout bill. As a result, the Division of Local Services processed the November 2019 distribution to Lexington only in the amount of $716,858, a 14.6% match, based on the money available in the CPA Trust Fund at the time. In January 2020, however, the DOR recalculated the state match to include the 2019 State budget surplus of $20 million, increasing Lexington's distribution by an additional $503,092 to a total of $1,219,950 for FY20. The general decrease in state matching funds is due primarily to an increased number of communities passing CPA bylaws and therefore competing for limited CPA Trust Fund payments, and stagnant recording fees collected at the State's Registries of Deeds. Until recently, transaction fees at the Registries of Deeds had not been adjusted since the CPA was signed into law in 2000. The Governor of Massachusetts, Charles Baker, signed the Fiscal Year 2020 budget into law on July 31, 2019 which included a permanent increase to the CPA Trust Fund. On December 31, 2019 the increased fees went into effect at the Registries of Deeds. The fee for municipal lien certificates was increased from $10 to $25 and for most other documents the filing fee was increased from $20 to $50. In the past, approximately $24 million had been collected annually and distributed to the CPA Trust Fund. Once the new fees are fully implemented, it is anticipated that the CPA Trust Fund will increase by an additional $36 million 2