1). Develop a 2023 monthly budget with the aforementioned changes. Assume that the child/staff ratio will be maintained at 8:1. Also, determine the total and per child expenditures, revenues, and balances (i.e., surplus or deficit) for each month from January to December 2023. Enrollment in the center could grow by 5 percent per month if space is available.

2). Give an example of a memo summarizing the findings and responses to all questions below.

I) In the memo, please briefly explain the main assumptions and rationale for the calculations in the budget.

II) To help cover the center's deficit, the city is considering two revenue proposals:

a) Adopting a sliding scale fee based on annual family income. Assume that city employees can be grouped into three income classes: Low income (below $45,000): average $37,000/year Middle income ($45,000-65,000): average $58,000/year High income (above $65,000): average $72,000/year,

and that city workers are evenly divided between these income classes. The new fee structure requires that low-income families pay $600 per month per child, middle-income $650, and high-income $700.

Is this fee progressive, regressive, or proportional? Why? Discuss the pros and cons of this fee in the memo (hint: refer to the principles of sound taxation).

b) Since the state start-up grant is gone in 2023, the city is considering subsidizing the daycare center through property taxes, possibly $8,000 per month. Is this a good idea? Explain in the memo (hint: refer to the principles of sound taxation).

3) Rather than using the old school, the Union proposes to build a new daycare facility. What factors or elements should be considered when preparing a budget for this expenditure? What funding sources would you recommend for financing the new daycare center? Why?

4) What recommendations would you offer to the city for a fiscally sustainable daycare center?