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. . 46 Front-End Financing for Municipalities The most critical problem identified by the Advisory Committee is the in- equity of revenue sources and financial burdens on various levels of local government (municipalities, counties, school districts) resulting in part from jurisdictional limitations on taxing authority.* Inequalities exist where municipalities normally receive a high proportion of the population impacts from energy development, but have the least financial ability to provide services and facilities for these new residents. Counties and school districts also experience financial burdens, but are more likely to have the borrowing capacity, and other resources resulting from a large increase in the tax base, to deal with the impacts. There is yet another area where the financial burden may not be distri- buted equitably. Municipally owned power plants are exempt from local property taxes, even when constructed outside the political and taxing jurisdiction of the owning municipality. Thus, the area receiving the impact from the facility may have no increased property tax base to help pay for the additional burdens created. The law could be revised to re- quire payments in lieu of taxes where significant additional burdens are placed on areas otherwise unable to tax such facilities. There are basically two methods for dealing with the problem of illadequate financing for municipalities, and to a lesser extent, other local govern- ment entities. One is to establish institutional mechanisms for a more equitable sharing of the tax base and revenue sources among various levels of government. The second alternative is to have funding readily avail- able at the state level to assist impacted municipalities. The latter alternative is discussed later in this section as a part of the need to consolidate and expand funding sources at the state level. The Advisory Committee believes that both approaches--encouragement of the pooling of tax revenues and development of a significant state impact assistance fund--are needed to deal with front-end financing problems. *In addition to the difficultues experienced by municipalities when energy facilities are located in the county, there are also potential interstate problems. For example, Rangely is likely to experience major population impacts from the two proposed oil shale plants in Utah. . .