State Announces 23% Projected CPA Trust Fund Match for Fall 2014

March 13, 2014: In a bulletin released yesterday, the state's Department of Revenue (DOR) announced that CPA communities can expect a 23% first round match of local CPA surcharge revenues this fall.  The disappointing estimate is the result of a steep decline in collections at the state's Registries of Deeds over the past few months.  DOR said the trust fund balance "will be sufficient to provide a first round match of 23% of the surcharge levied by each city and town," and the "estimates are subject to change depending on Registry of Deeds collections between now and November." Towns and cities with a surcharge of 3% will receive additional funding in rounds two and three, which will result in a higher match for those communities. 

DOR's estimate does not include any potential funding for the trust fund from the FY14 state budget surplus.  The Coalition is strongly advocating for another $25 million to be transferred from the surplus to the CPA Trust Fund, and if successful, this transfer would significantly boost the percentage match for this coming fall.  Last year's transfer of $25 million was enough to boost the first round percentage distribution to 52%, with all 3% communities receiving higher amounts.

What Trust Fund Distribution Amount Should Communities Use for their FY15 CPA Budget?

Communities with a surcharge of less than 3%:  Use 23% of your expected FY14 local CPA surcharge revenue, as directed by DOR.

Communities with a surcharge of 3%:  DOR did not provide guidance in their bulletin for 3% communities, so the Coalition would advise you to call your DOR Field Representative for individual guidance.

Important Additional Information From DOR

DOR also issued a reminder to communities on the potential need to transfer additional funding to the three 10% reserve categories for this fiscal year. DOR stated:

The FY2014 State budget provided supplemental CPA funding of up to $25 million from the State’s General Fund surplus. This supplemental funding allowed for a first round match of 52.22% rather than what would have been a first round match of less than 31%.

Some CPA communities may not have met the annual 10% appropriation/reservation requirement for all three purposes prior to the setting of the FY2014 tax rate due to the timing of the trust fund distribution and the amount in excess of our recommendation in last March’s Bulletin. If the community hasn’t, it should make the corrective appropriation from their FY2014 budgeted reserve or the CPA unreserved fund balance as of June 30, 2013 at their next legislative body’s meeting. If these funds are not available, a corrective appropriation should be taken as soon as practicable from the new fund balance as of June 30, 2014 or FY2015’s estimated CP Fund revenues. The extra State funds, if unbudgeted on Schedule A-4 when the FY2014 tax rate was certified, cannot be appropriated from until they become part of the new fund balance.

Further Resources

> Read the full DOR Budget Memo, and scroll down to page 3 for CPA information.

> Read our article on "Understanding the Formula Used to Distribute Revenue from the Statewide CPA Trust Fund."

> Click the link to view the CPA Trust Fund collections at the Registries of Deeds, updated by the Coalition each month.