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18 April, 09:23

The Adams Independent School District wants to sell a parcel of unimproved land that it does not need. Its three best offers are as follows: from the state's Department of Public Safety (DPS), $2.3 million; from the Second Baptist Church, $2.2 million; and from Baker Motors, $2.1 million. DPS would use the property for a new state highway patrol barracks, Second Baptist would start a church school, and Baker would open a car dealership. If you are the financial adviser for the school district, which offer would you prefer? Why?

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  1. 18 April, 09:40
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    The offer by Baker motors should be considered as it will bring tax revenue in future.

    Explanation:

    The Adams Independent School District wants to sell a parcel of unimproved land that it does not need.

    The state's Department of Public Safety (DPS) is offering $2.3 million, it would use the property for a new state highway patrol barracks.

    The Baptist Church is offering $2.2 million, it would start a church school.

    Baker Motors is offering $2.1 million, it would open a car dealership.

    The Baker motors offering is the lowest but it is the best choice if we see from the long term perspective. Property tax is a major source of income for local government and their subdivisions such as cities, counties and school districts.

    We know that the properties owned by the Federal, state and local governments and by certain charitable organizations are exempted from ad valorem property tax.

    But a car dealership will bring high tax revenue to the school district in the future. So, the offer by Baker motors should be considered.
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