A municipal budget comprises which two essential functions of authority?

The correct answer highlights two fundamental aspects of a municipal budget: establishing appropriations and taxation authority. Appropriations refer to the legal authority granted to spend specific amounts of money for designated purposes. It ensures that funds are available for intended services and projects, reflecting the municipality's priorities. Taxation authority, on the other hand, allows the municipality to levy taxes that generate revenue necessary to fund the approved appropriations. Together, these functions ensure that the municipality can responsibly allocate resources while adhering to legal frameworks regarding spending and revenue collection.

This answer is particularly significant, as it underscores the balance of revenue generation through taxation with the structured planning of expenditures, forming the backbone of the municipal budget process. The ability to set appropriations while simultaneously having the authority to tax enables municipalities to forecast their financial capabilities, plan for future needs, and maintain fiscal accountability.