Question

To promote increased use of port facilities in a major coastal​ city, a state government has decided to construct a​ state-of-the-art lighthouse at a projected cost of​ $10 million. The state proposes to pay half this cost and asks the city to raise the additional funds. Rather than raise its​ $5 million in funds via an increase in city taxes and​ fees, however, the​ city's government asks major businesses in and near the port area to contribute voluntarily to the project. The city is likely to face problems in raising the funds because

Answer 1

The city is likely to face problems in raising the funds because different businesses may try and get out of paying their portion thinking that other businesses will 'pick up the tab' for them. Basically, some businesses will lay low and try to avoid paying towards the new lighthouse thinking that other companies will pay it for them to try and keep their benefits without payment.