2021-03-23-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%. 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 2021 (FY21), the annual surcharge averaged $444.09 billed per Lexington household. Our commercial and industrial taxpayers were billed $1,079,125 in FY21, representing approximately 19.41% 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 FY20, for which the net surcharge raised $5,214,556. Lexington's FY21 state match totaled $1,549,955 or 29.7% of its surcharge, the highest percentage distribution since FYI 6. While higher than the initial estimate, the FY21 state match did not include a 2020 State Budget surplus as anticipated due to COVID-19, a global pandemic. 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. The Governor of Massachusetts, Charlie 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. This year's distribution was comprised of two months at the old fee rate (November -December 2019) and ten months at the new fee rate (January - October 2020). The first distribution to CPA communities that will include a full year of revenue at the new rate will occur on October 31, 2021. In the past, approximately $24 million has 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 in revenue, totaling $60 million annually to be distributed to CPA communities. With the passage of the legislation permanently increasing the Trust Fund fee revenue, the state is no longer expected to provide surplus funding dollars for CPA. Given the increased number of CPA communities competing for limited funds, the Town projects a conservative state match estimate for FY22, at a 30% rate. The chart below shows the state matching funds received to date. 2