Island towns have learned to depend on Community Preservation Act (CPA) funds to help with conservation, preservation, and affordable housing initiatives. But that trove of funds is on the decline.
West Tisbury selectmen have considered whether to ask voters to reconsider their town’s participation. Other towns ought to do the same. There are several reasons.
The CPA-enabling legislation was never intended to include a permanent 100-percent match by the state of the surtax contribution made by town real estate taxpayers. Towns could, and all Vineyard towns did, choose to impose a surtax of up to three percent on each tax bill.
The original legislation envisioned a 25- to 30-percent state match. Between 2002-2004, only a few towns had joined the CPA, and real estate was flying high. That is, it was valuable, and it was selling, generating significant funds from the CPA levy on real estate transactions.
So the state matched town contributions at 100-percent. When the real estate market collapsed in 2008-2009, the state match began to slide. This year it will be about 40 percent, and most observers expect the state match to decline further, approaching and then remaining at about 25 to 30 percent of the town contributions.
Of course, that’s not nothing, but there is more to consider.
CPA money flows predominantly to wealthier cities and towns because their property taxpayers can afford the surcharge and their high property values tend to generate a higher state match. The top 10 recipients of state CPA money include Cambridge and Newton. The others in the top 10 are Barnstable, Weston, Nantucket, Westford, North Andover, Sudbury, Duxbury, and Plymouth. Weston is the state’s wealthiest community, and Sudbury is the fifth wealthiest. The average median household income of the top 10 CPA communities is about 65-percent higher than the average statewide.
Don’t look for Worcester, Springfield, Pittsfield, Lynn, New Bedford, Fall River, Lawrence, Lowell, Brockton, and Gloucester to be signing up anytime soon, although fees generated by real estate sales in those less well-to-do areas do go into the pot to be shared by the upper-income slice of Massachusetts communities. It’s a sort of reverse Robin Hood approach, especially troublesome in these difficult economic times that are especially difficult for less prosperous communities.
It’s also the case that the wealthier communities have the financial resources, this time from their own taxpayers, to add to the CPA funds in order to fully fund conservation, preservation, housing, and even recreation goals. For these towns and cities — and the Vineyard towns qualify — the CPA funding is a help, but hardly vital.
As is always the case with funding that comes from federal and state sources, beyond the absolute control of town officials and town voters, the stability of the funds flow is uncertain. Towns that commit themselves to projects based upon a level of matching funds that fails to meet expectations will find themselves asking taxpayers to pay more, or suspending or canceling those projects. It’s a risk, one that voters and their elected leaders — should they get the chance to consider the wisdom of asking more of taxpayers and getting less from the state in the CPA program — ought to weigh carefully.