Cases $611.$

Evaluating Financing Options. $($ LO$6-1)$ Surf City is a rapidly growing city on the Mid$-$Atlantic coast, with a current population of $200,000.$ To cope with the growing vehicular traffic and the need for infrastructure expansion $($e$.$g$.,$ streets, sidewalks, lighting, storm water drains, and sewage systems$),$ members of the city council have recently engaged in debate about the merits of alternative mechanisms for financing expansion. The alternatives the council is exploring are $(1)$ a sales tax referendum to increase an existing one$-$half$-$cent capital improvement tax by one$-$quarter cent on every dollar of sales and $(2)$ a development fee of $$0\mathrm{.}50$ per square foot imposed on real estate developers for new residential and commercial buildings. Public debate at recent city council meetings has been contentious between council members, citizens, and developers.

Required

Evaluate each potential financing option from the viewpoint of a city council member, current homeowners and business owners, and potential new homeowners or new business owners. Provide a written analysis of the options from the perspective of each party.