alculate the amount that a school district would get in grant funding from a state under the following grant regimes. For the school district in question, the value of land in the district is $100,000 per pupil and the local property tax rate for the school district is 2.5%. Foundation grant with a foundation level of $6,000 per pupil and foundation tax rate of 3% Guaranteed tax base (GTB) grant with a guaranteed base of 200,000 per pupil. What would happen under each grant regime if the school district raised its tax rate to 3% ? Given the pattern of results in (a) - (C), what can you say about the incentives offered for school districts in setting property tax rates?

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Chapter1: Making Economics Decisions
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alculate the amount that a school district would get
in grant funding from a state under the following
grant regimes. For the school district in question, the
value of land in the district is $100,000 per pupil and
the local property tax rate for the school district is
2.5%.
Foundation grant with a foundation level of $6,000
per pupil and foundation tax rate of 3%
Guaranteed tax base (GTB) grant with a guaranteed
base of 200,000 per pupil.
What would happen under each grant regime if the
school district raised its tax rate to 3% ?
Given the pattern of results in (a) - (C), what can you
say about the incentives offered for school districts in
setting property tax rates?
Transcribed Image Text:alculate the amount that a school district would get in grant funding from a state under the following grant regimes. For the school district in question, the value of land in the district is $100,000 per pupil and the local property tax rate for the school district is 2.5%. Foundation grant with a foundation level of $6,000 per pupil and foundation tax rate of 3% Guaranteed tax base (GTB) grant with a guaranteed base of 200,000 per pupil. What would happen under each grant regime if the school district raised its tax rate to 3% ? Given the pattern of results in (a) - (C), what can you say about the incentives offered for school districts in setting property tax rates?
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