Correct Answer:
C
State and local government budgets primarily serve to:
Set public policy priorities
Provide legislative control over taxing and spending
Serve as a financial planning tool
Debt policy is typically established outside the annual budget process and guided by a separate debt
management policy that sets borrowing limits, credit rating objectives, and debt service goals.
Relevant Reference:
GFOA Best Practices – Role of the Budget
NASBO Budgeting Handbook
GASB Concept Statements – Financial Reporting Objectives
Answer : C. determine debt policy
