The CPA Trust Fund: Understanding Annual Interest and Expenses

The Community Preservation Act legislation tasks the state’s Department of Revenue (DOR) with maintaining the statewide CPA Trust Fund - the funding source for the annual matching payments to CPA communities.  Revenue for the trust fund accrues monthly from the small surcharge on most transactions at the state's Registries of Deeds, and each fall the fund’s balance is dispersed to CPA communities according to the formula contained in the CPA legislation.  

But before the funds are paid out to CPA communities, DOR makes two adjustments to the fund balance. First, the interest that accrued during the year is added to the fund’s bottom-line. And second, any administrative and processing costs incurred by DOR in administering the fund are subtracted from the fund balance. Since CPA was passed in FY2001, total interest deposited in the fund has exceeded $16 million, while DOR has charged about $2.5 million in expenses. 

In many years the interest payments outweighed the expenses, resulting in an overall net increase for the trust fund. In fiscal year 2013 however, with today's low interest environment, only $22,700 in interest was added to the roughly $27 million in Registry fees. Fortunately, expenses were fairly low as well, as DOR spent about $140,000 in administrative costs. This FY2013 expense represents more than a 20 percent decrease in the amount spent by DOR on administrative funds during each of the past four years.

For more information, see the chart below detailing the annual state trust fund interest and DOR expense since CPA began.

 

Fiscal Year DOR Administrative costs Interest earned on the CPA State Trust Fund
FY2001 $158,254.91 $0.00
FY2002 $309,121.93 $0.00
FY2003 $195,344.86 $625,206.90
FY2004 $268,854.48 $928,212.95
FY2005 $0.00 $1,819,681.97
FY2006 $475,658.44 $3,457,649.31
FY2007 $94,248.60 $4,797,647.54
FY2008 $75,953.33 $3,996,065.61
FY2009 $194,742.71 $856,954.17
FY2010 $200,052.38 $45,659.29
FY2011 $188,866.49 $31,911.15
FY2012 $185,827.63 $28,881.99
FY2013 $141,095.05 $22,786.26
     
TOTAL $2,488,020.81 $16,610,657.14