In early July, Governor Patrick signed the Fiscal Year 2013 Budget into law. The Budget contains significant changes to the Community PreservationAct (CPA), which currently gives cities and towns the option to tack a surcharge onto their property tax bills of 1% to 3% to fund low income housing, recreational facilities, open space, and historic preservation projects. These changes can provide reductions in the annual cost of homeownership in cities and towns that have adopted the CPA, while still enjoying the benefits that the Act provides.
Provisions of the Law
Thus far, 148 cities and towns, from Williamstown to Provincetown, Stockbridge to Newburyport, have adopted the CPA, but are looking to reduce the surcharge on property tax in light of current economic constraints. Section 74 of the 2013 Budget provides an alternative funding mechanism by which the community, at their option, can reduce the property tax surcharge, but without (significantly) reducing the overall funding levels of CPA projects (low income housing, open space, outdoor recreation, and historic preservation).
The new optional funding scheme is two-pronged, allowing a surcharge of only 1% on the property tax, while drawing the remaining allowable 2% from non-tax revenue sources. These sources can include non-tax revenue items, such as local hotel taxes, linkage fees and inclusionary zoning payments, proceeds from the sale of municipal property, and parking and traffic tickets.
Note that similar legislation to the CPA legislation that passed in the budget was filed in both the House and Senate. These bills contain increases in Registry Deeds filings to bolster the non-tax revenue supply. Increasing the cost of homeownership transfers being unacceptable, this part was left out of the budget piece, which became law and will soon be available for local adoption.
For more information on the Community Preservation Act, visit the State’s Official site at http://commpres.env.state.ma.us/content/cpa.asp .