Please assist me with this problem:
If the General Fund of a certain city needs $6,790,000 revenue from property taxes to finance estimated expenditures of the next fiscal year and historical experience indicates 3 percent of the gross levy will not be collected, how much should the gross levy for property taxes be? Show all computations in good form.
This problem is a 'gross up' type problem where we are to establish a known net against an unknown gross.
This type of problem is common is business (because of the net effect of taxes). In their employment contracts, business executives often ask ...
The solution accounts for the amount a governmental entity should 'gross up' its budget to account for funds it anticipates will not be collected.