Monday, October 26, 2009

CPA Funding in Trouble

The ecomomic slow down in Massachusetts is taking a toll on the state's Community Preservation Act. The CPA was enacted in 2000 and is a “tool to help communities preserve open space and historic sites, and create affordable housing and recreational facilities (CPA website)”. There are currently 135 Massachusetts communities participating in the CPA.
Here is how it works...Local funds are raised through a property tax surcharge of up to 3%. The state provides matching funds to cities and towns based on the amount of CPA funds it collects. The Commonwealth's matching funds come from a $20 per document surcharge at the registries of deeds. According to the Boston Globe the recent decrease in recordings at the registries will result in a 40% decrease in matching funds distributed by the Commonwealth in the upcoming year. The big problem is many participating communities initiated long range projects and/or acquisitions based on CPA funding and now find themselves expecting less dollars.
The Boston Globe gives examples of towns receiving less CPA funding this year…last year Waltham received $1.3 Million, this year it will received $729,000; last year Ashland received $524,000, this year it will receive $294,200.

And this directly from the Boston Globe:
Stuart Saginior, Executive Director of the Community Preservation Coalition, a nonprofit organization that provides technical assistance to communities adopting or implementing CPA, said the matching is projected to be as low as 28% next year. The current CPA legislation states that it can go down as low as 5%.
In an effort to keep the match from continuing downward, the coalition is supporting legislation filed by Democratic Senator Cynthia Stone Creem of Newton and Democratic Representative Stephen Kulik of Worthington that would raise the minimum match rate to 75%.
To support the legislation with additional funds, the bill would increase the CPA fee on real estate recordings instruments from $20 to $40.

Undoubtedly, users of the registries of deeds will be following the Creem/Kulik bill closely. If it passes the recording fees of most documents will increase by $20.

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