Which statement is true about the Stabilization Fund?

• A. The balance can be used for any lawful purpose.
• B. Interest accrues to the fund.
• C. Expenditures require a simple majority vote.
• D. Funds may be used only for debt service.

Answer: (A)

A Stabilization Fund is a general-purpose reserve meant to smooth budget fluctuations, providing flexibility when revenue or spending swings occur. Because of this flexible purpose, the balance can be used for any lawful purpose once the appropriate appropriation is made. That broad applicability is what makes the statement true: the fund isn’t inherently restricted to a single use like debt service, nor is its operation defined solely by how interest is handled or by a simple majority vote. In practice, withdrawals typically require legislative appropriation and may involve thresholds or conditions set by law, rather than automatic or narrowly defined triggers. The idea that the fund's assets are limited to debt service or that interest automatically accrues to the fund misses the point of its role as a flexible stabilization mechanism.