Bill would set minimum CPA match

On Sept. 29, the Joint Committee on Community Development and Small Business will hold a hearing on legislation that would boost state support for the Community Preservation Act.

The CPA gives cities and towns the authority, at local option, to adopt a property tax surcharge of up to 3 percent for the purposes of creating affordable housing, acquiring open space, preserving historic buildings, or improving recreation facilities. The local surcharge revenues are then matched with money from a statewide trust fund supported by real estate transaction recording fees.

In 2008, for the first time in the CPA’s eight-year history, CPA communities received an average match of 74 percent, rather than the dollar-for-dollar match seen in previous years. The match fell dramatically last year, to below 30 percent for many communities, due in part to the popularity of the program as well as the decline in real estate activity.

Senate Bill 90, filed by Sen. Cynthia Stone Creem of Newton and Rep. Stephen Kulik of Worthington, would stabilize the CPA trust fund and guarantee that CPA communities receive a match of at least 75 percent each year.

The CPA trust fund has begun to register a slight upward trend in revenues, according to the Department of Revenue. In May 2009, collections were up just a bit over May 2008, marking the third consecutive month of increased collections as compared to last year.

While the total fund balance is still well below last year’s level at this time, the Department of Revenue recently raised its first-round CPA trust fund match projection to 30 percent.

A guaranteed minimum match would give local governments a reliable source of funds for specific needs. Especially in a tough economy, the CPA helps municipalities fund open space, housing, preservation and recreation projects without diverting funds from priorities such as public safety, education, maintenance and public works.

Communities may tailor CPA projects based on local priorities. To date, 140 of the state’s 351 municipalities have adopted the CPA.

The CPA gives communities leverage to obtain other funds. Some communities have used their CPA funds as the matching source necessary to qualify for other state, federal and private funds on a project-by-project basis.

Using CPA funds, municipalities have preserved 10,274 acres of open space, including important wetland resources such as lakes, rivers, and saltwater ponds. The CPA has funded the creation or rehabilitation of more than 2,300 affordable housing units and the development of hundreds of innovative affordable housing programs. More than 1,300 historic preservation projects and 500 recreation projects have been approved under the program.

The Community Development and Small Business Committee is expected vote on the bill (S. 90) during the current legislative session.