Final answer:
The largest item of state spending is not for highways but education, which constitutes about one-third of state and local government expenditures. The correct answer is option: A.True
Step-by-step explanation:
The statement that the largest item of state spending is for highways is false. The most substantial portion of state and local government spending is directed toward education, which accounts for about one-third of the total expenditures.
These expenses have become a significant part of the budget as state and local government spending has grown from around 8% to about 14% of GDP over the last four decades. States are required by law (with the exception of Vermont) to balance their budgets, meaning any shortfall must be addressed through mechanisms such as higher taxes, lower spending, or using previous savings.