Calculate the amount a school district would get in grant funding from a state under the following two grant regimes. Note that the value of land in the district is $100,000 per pupil and the local property tax rate for schools is 2%.

Regime 1:

a. Foundation grant with a foundation level of $5,000 per pupil and foundation tax rate of 3%.

b. Guaranteed tax base (GTB) grant with a guaranteed base of $200,000 per pupil.

Regime 2

a. What would happen under each type of grant program if the school district raised its tax rate to 2.5%

b. What incentives are offered for school district behavior in setting tax rates by each of the two programs?