As previously noted on this site, the major elements of the Community Preservation Act changes that had long been sought were included in the final FY13 budget as outside actions.
The most controversial aspect of the changes related to funding. The legislature declined to increase recording fees to support the CPA trust fund — the fund that is used to match local property tax contributions. This would have violated the no-new-tax pledge that the Speaker had made early in the session.
Instead the final conference report on the budget does two things to bolster the fund: First, it makes a one time transfer or $25 million to bolster the trust fund, contingent on year-end surplus being available at the end of Fiscal 2013:
SECTION 155. (a) Notwithstanding any general or special law to the contrary, after complying with clause (a) of section 5C of chapter 29 of the General Laws, the comptroller shall dispose of the consolidated net surplus in the budgetary funds for fiscal year 2013 in the following order to 1602 the extent that funds are available: (i) transfer $25,000,000 to the Massachusetts Community Preservation Trust Fund, established by section 9 of chapter 44B of the General Laws; and (ii) transfer the remaining balance from the General Fund to the Commonwealth Stabilization Fund.
This is a substantial potential contribution — equaling almost the entire distribution in 2011. However, it is only a one-time contribution. The distributions from the CPA trust fund have gotten substantially diluted over the years as more and more communities have adopted the CPA. Additionally, trust fund revenues have been depressed because of lower real estate turnover. The 2011 average distribution per community, $183,217, was less than 1/3 the average distribution in 2006. The $25,000,000 will bring contributions up materially, but not to their previous high and will not give communities a consistent match stream that they can count on. Click here for the history of trust fund distributions.
To allow the use of additional resources for CPA purposes without increasing taxes, the conference report gives municipalities the option to dedicate other existing local revenue sources to the Community Preservation Act.
SECTION 74. Section 3 of said chapter 44B, as so appearing, is hereby amended by inserting 822 after subsection (b) the following subsection:- 823
(b½) Notwithstanding chapter 59 or any other general or special law to the contrary, as an 824 alternative to subsection (b), the legislative body may vote to accept sections 3 to 7, inclusive, by 825 approving a surcharge on real property of not less than 1 per cent of the real estate tax levy 826 against real property and making an additional commitment of funds by dedicating revenue not 827 greater than 2 per cent of the real estate tax levy against real property; provided, however, that 828 additional funds so committed shall come from other sources of municipal revenue including, but 829 not limited to, hotel excises pursuant to chapter 64G, linkage fees and inclusionary zoning 830 payments, however authorized, the sale of municipal property pursuant to section 3 of chapter 831 40, parking fines and surcharges pursuant to sections 20, 20A and 20A1/2 of chapter 90, existing 832 dedicated housing, open space and historic preservation funds, however authorized, and gifts 833 received from private sources for community preservation purposes; and provided further, that 834 additional funds so committed shall not include any federal or state funds. The total funds 835 committed to purposes authorized under this chapter by means of this subsection shall not exceed 836 3 per cent of the real estate tax levy against real property, less exemptions, adopted. In the event 837 that the municipality shall no longer dedicate all or part of the additional funds to community 838 preservation, the surcharge of not less than 1 per cent shall remain in effect, but may be reduced 839 pursuant to section 16.
The Community Preservation Coalition is a great resource for understanding the various changes to the Community Preservation Act effected by the conference report, which Governor Patrick has now approved.
Please don’t hesitate to contact us directly for assistance!