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If you are starting to think about your 2021 budget, you might like to know a way to get a little more money. The Department of Local Government Finance provides Form 4b, which allows you to calculate the funds available for the coming year. One item you must take into account is the current year’s unspent appropriations (Line 2 on the old Form 4b and Line 5 on this year’s new Form 4b). That makes sense. Usually, if the money is appropriated to be spent this year, you should not use it for next year’s budget. However, most years, your township does not actually expend its full budget.  Now that we are halfway through the 2020 budget year, you may […]

Local Income Tax (LIT) can be deposited into any fund.  Most townships determine at the time of the annual budget how much LIT to allocate to each fund.  However, the trustee can change the allocation at any time.  Unlike property tax, which has to be deposited into the fund for which it was levied, LIT can be deposited into any fund at any time. If a fund is running short of cash, the trustee is empowered to begin depositing more LIT into that fund, and less into funds that don’t need it. We don’t recommend changing past LIT deposits that have already been recorded.  It is better to change the current month deposit and any future LIT deposits going forward. […]

Often, trustees are advised not to shift money from one fund to another. However, your Township may have a way around that. If a fund receives a property tax levy, it may also be charged rate cap credits (circuit breaker credits). Rate cap credits reduce the net revenue to the fund. The levy collections must be deposited into the fund for which they were raised. However, the rate cap credits can be allocated to almost any fund. By reallocating the rate cap credits, the trustee can shift some revenue between funds. Example: Suppose your Township has extra money in a cumulative fire building and equipment fund, and there is money needed in the Township assistance fund. When the county auditor […]

Your township may be allowed to raise extra tax money to pay for firefighting apparatus and equipment.  That includes fire buildings. Even though township property taxes are limited by state law, the limit does not always apply to money raised for debt payments. Debt can be used to buy firefighting apparatus and equipment, and an additional tax can be levied to make the payments. Issuing bonds is expensive, but there is a cheaper way to finance firefighting apparatus and equipment. A special rule allows a township to obtain a relatively simple, cheap, loan or lease through a bank.  The term must be six years or less.  There are still a few legal hoops to jump through, including board approval, and […]

Townships can accept donations from individuals and treat them as charitable contributions. IRS will view as charitable any donation to “the United States or any state, the District of Columbia, a U.S. possession (including Puerto Rico), a political subdivision of a state or U.S. possession, or an Indian tribal government or any of its subdivisions that perform substantial government functions.” That means the contributor may deduct the amount on his or her tax return. Contributions of this kind usually come in response to a specific appeal by the Trustee for support of a particular program, but any voluntary contribution to a township can be treated as charitable. A tax deduction is allowed for contributions of physical items, such as food […]