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The Town of Sudbury was among the first towns in Massachusetts to adopt the Community Preservation Act surcharge in March of 2002. After adopting a 3.0% surcharge on property taxes, the Town became eligible for a state match, which is funded from the state’s CPA Trust Fund. That fund primarily generates revenue from fees collected at the Registry of Deeds and other State budget surplus funds.
The surcharge is separate from Proposition 2 ½ , allowing communities to generate additional revenue for projects that qualify for CPA funding. Qualified projects must meet a variety of criteria set forth in the CPA statute, but broadly speaking they must fit the primary categories of open space, recreation, historic preservation, and community housing.
Proponents of the CPA surcharge point to the popularity of the projects that get funded as proof that a community should keep the surcharge. Indeed, over the course of 22 years of Town Meetings since adopting the CPA surcharge, Sudbury voters have approved the vast majority of CPA articles.
Sudbury has acquired hundreds of acres of open space with CPA funds. It has also used CPA funds for major recreational assets including the Lincoln-Sudbury softball field, Cutting Field, Feeley Field, and the new lighted multisport court at the Fairbank Community Center.
The funds have helped with preservation of Town documents, cemeteries, and inventories of historic assets, landscapes, and collections. In fact, the historic bridge at the Wayside Inn is currently being restored with CPA funds.
The CPA funds are also a primary source of cash for the Sudbury Housing Trust and the Sudbury Housing Authority. Both have used the funds to increase the number of affordable housing units in Sudbury since 2002.
Opponents of the surcharge point to Sudbury’s average single-family tax bill – which is currently among the 20 highest in the state of Massachusetts. The surcharge adds to the tax burden for residents. The added burden is nominal in the sense that it’s usually hundreds, not thousands, of dollars per year. There are also exemptions for residents that qualify based on income and other criteria.
Some would argue that no tax dollars collected by the Town go further than CPA surcharge thanks to the CPA’s state match. But in a town with a hefty tax bill, the CPA surcharge is an easy target for anyone looking to ease the tax burden.
The state match can vary significantly from year to year as well, giving critics of the surcharge fodder for an effort to reduce or revoke the surcharge. In the early years of the program the match was 100 percent from the state. However, the typical match dipped as more communities joined the program, and as revenue for the CPA trust fund varies each year. Sudbury’s matches from the state have been as low as 18 percent and as high as 100 percent since joining the program.
Controversy or White Noise?
Applications for CPA funding have been a regular source of controversy over the years. Affordable housing is always a hot topic in Sudbury and across the state, and the CPA statute mandates that 10% of annual CPA revenues be set aside for housing. That virtually guarantees some amount of pushback. But controversy can be found in any number of applications that come in each year.
Some applications are perceived as frivolous, or a low priority, even if they qualify for CPA funds and the annual CPA budget can afford them. An application that included provisions for amenities and possible art installations along the Bruce Freeman Rail Trail got pushback two years ago, but that also passed at Town Meeting.
Even while the worthiness of any given CPA-funded project is a subjective matter with opinions varying from one resident to the next, most CPA articles pass with little debate at Annual Town Meeting.
That’s precisely why it’s hard to discern if the “controversy” around the CPA surcharge is much of a controversy at all. No community that has adopted the CPA surcharged has ever revoked it. And of all the communities participating in the program, very few have even reduced the surcharge. That’s due, in part, to the fact that the State match formula increases the match with higher surcharges, though the surcharge is capped at 3%.
Popular with the Pros
The CPA program tends to get a lot of support from municipal professionals. They cite the high return on investment thanks to the state match, the flexibility it provides, and the fact that certain projects and acquisitions in their towns just wouldn’t have happened if they didn’t have the CPA funding source. When New Beford’s Mayor vetoed a city council decision to put CPA revocation on a ballot, he cited the return on investment due to the match:
“[CPA] has enabled the City to complete a total of $15.6 million in preservation and open space projects, of which the City leveraged a total of $7.2 million of state and private funds – by any standard, a healthy return on investment.”
CPA-funded projects can also take pressure off the Town’s capital budget. For example, that bridge near the Wayside Inn could have become a significant capital project if it didn’t get CPA funding. CPA funds didn’t just fund the project, they allowed the Town to pursue other projects with its existing capital budget.
Similarly, land acquisitions can be less expensive to the taxpayer when CPA funds are used thanks to the State match and interest income generated from CPA fund reserves.
Alternatively, the near-term tax impact of expensive acquisitions can be softened because CPA projects can be bonded, though that would likely increase the cost in the end due to interest that would have to be paid.
Undefeated
One of the challenges with CPA project applications is that they can be submitted by anyone. That means there’s no long-term plan or strategy for optimally deploying these funds. The Community Preservation Committee has a defined approach for managing their budget, administering their reserves and vetting projects, and much of their work is governed by the CPA statute. But the CPC can only consider the project applications that others in the community choose to put before it. That can lead to disagreements about priorities and the merits of even a qualifying project.
It’s fairly common to see Massachusetts towns debating a proposal to revoke or reduce the CPA surcharge. But it’s quite rare to see such a proposal go forward, let alone succeed. Yet the conversation regularly resurfaces, particularly when residents in a community are experiencing financial stress, when the economy takes a turn for the worse, or in towns that are heavily dependent on residential property taxes like Sudbury.
You don’t have to look beyond Sudbury to see what happens when a community tries to revoke or reduce the CPA surcharge. Sudbury tried to start the process in 2010. Article 40 of the 2010 Annual Town Meeting proposed to cut the surcharge from 3% to 1.25%. (Part of the reason it can’t be cut completely is because towns are required to keep some amount of surcharge to pay for debt already incurred by prior projects.)
After a robust debate in the hall, the motion was “voted and defeated overwhelmingly.” (PDF Page 89)
Recent efforts to revoke or reduce the CPA surcharge failed in Groveland and New Bedford. Just last week, Winchester voted to support adding a 1.5 percent CPA surcharge. Groveland was only the fourth revocation attempt to even make it to a ballot vote according to the Community Preservation Coalition. All four failed.
Nevertheless, proposals to revoke the surcharge are unlikely to go away. Local property tax bills rarely go any direction other than up, leaving advocates for minimizing taxes few places to cut a meaningful chunk out of the average tax bill. While the CPA program has proven resilient, the CPA surcharge will likely remain a target.
