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Are you working on your city’s 2014 budget? We know how busy you are, so the League’s newly updated Budget Guide for Cities focuses on just those new laws that you need to know about now.
Great news—some of the new laws are budget pluses. Number one is that cities will not pay state sales tax on most purchases made on or after Jan. 1, 2014. For the last 21 years, since 1992, cities had to pay sales tax on almost all purchases. In 2014, cities will still need to pay sales tax on enterprise activity purchases. But other city purchases will be exempt from the tax. The Budget Guide has links to more information on the sales tax exemption on page 2.
Another positive change for city budgets revolves around local government aid (LGA). A new LGA formula simplifies the system, focusing mostly on defining city need. Page 2 of the Budget Guide explains this new “city need” in just over half a page of text.
Has your city been snowplowing roads in uncompleted subdivisions? If so, the law allowing this is now extended to May 2, 2014. Page 4 of the Budget Guide tells you just what you need to know about this change.
How about Truth in Taxation dates? There is a handy chart on page 6 of the Budget Guide. Are there changes in PERA withholdings? Yes. See pages 14-15 for more charts that show the changes, effective Jan. 1, 2014.
Is your city looking for ways to pay for smoother streets? Cities may now use street reconstruction bonds for bituminous overlay projects. This and other important public finance changes affecting city budgets are on pages 11-12 in the Budget Guide.
Did you know that election law requires that the city clerk’s office must be open from 1 to 5 p.m. on the last day to file affidavits of candidacy? (This applies to both the last day for filing in city primaries and the last day for filing in cities that do not hold primaries.) Check out other changes to election laws on pages 8-9 of the Budget Guide.
Levy limits are in effect only for one year, on taxes levied in 2013, collectible in 2014. This one-year levy limit applies to cities with populations over 2,500. See page 4 of the Budget Guide.
Fire relief associations may not need to file financial reports. Under new law, effective Aug. 1, 2013, only those relief associations with assets or liabilities of at least $500,000 (instead of $200,000) in the prior year or any previous year must submit the financial report to the council, as well as the audited statements to the state auditor. See page 3 of the Budget Guide.
You can also get current information on election judge pay, the current IRS mileage rate, cost of living adjustment for 2012-2013, and forms cities may use to claim exemption from federal excise tax on purchases of diesel fuel and gasoline.
Contact Jeanette Behr
(651) 281-1228 or (800) 925-1122