The Department of Revenue (DOR) has issued its annual budget memo to municipalities and it includes an estimate of 11.57% for the November 2019 first round CPA Trust Fund distribution. How should communities use this information to prepare their FY20 CPA budget?
Communities with a local surcharge LESS THAN 3%:
When preparing their FY20 CPA budget, these communities should use the 11.57% figure to estimate their November 2019 trust fund distribution. The dollar figure these communities should include in the FY20 CPA budget is 11.57% of their estimated FY19 local revenue.
Cities and towns with a local surcharge of 3%:
In addition to the 11.57% on round one, these communities will receive additional funding in rounds two and three of the CPA Trust Fund distribution (called the "equity" and "surplus" rounds by DOR). Consult with your DOR field representative and/or municipal finance officials for assistance with estimating your total FY20 trust fund revenue.
Here is the text on the CPA portion of the memo:
"During FY2019, 173 cities and towns collected the local Community Preservation Act (CPA) surcharge and are eligible for state matching grants in FY2020. DLS estimates that the balance in the state trust fund will be sufficient to provide a first round match of 11.57% of the surcharge levied by each city and town.
In FY2020, there will be equity and surplus distributions for those cities and towns that have adopted the maximum 3% surcharge. With these additional distributions, the total state reimbursement for qualifying cities and towns will increase, depending on their decile and total surcharge amount. The above estimates are subject to change depending on Registry of Deeds collections between now and October."