A state game and fish agency wants to invest in a new fish hatchery. It is estimated that the cost of operating the system will be $2,000,000 per year after a one-time installation cost of $5,000,000 is incurred. The construction period will be one year. Once the plant is constructed and in operation, community benefits are estimated at $4,000,000 per year. The system would be financed by a property tax increment placed on the business and residential sectors. Without considering interest rates and discounting, how long will it take for the community to "break even" on this venture? SHOW ALL WORK.
What might be defensible logic behind using revenues from fishing licensing and fines from violators of fishing regulations, for the financing mechanism as compared to, say, a sales tax?
Write a brief one-paragraph budget justification to support this project. [NOTE: I refer to the statement on Page 175 of the text, to wit. "Well-developed budget justifications are the key to successful agency budget requests."]