Which requirement must local governments meet before issuing debt?

Before issuing debt, local governments are typically required to adhere to a balanced budget requirement. This entails ensuring that their projected expenditures do not exceed their anticipated revenues. A balanced budget is crucial for fiscal responsibility, as it indicates that the government can manage its finances sustainably without relying on borrowed funds to cover operating expenses.

Maintaining a balanced budget reflects the government's financial health and commitment to responsible fiscal management. It is a key indicator that the local government can meet its financial obligations, including debt service payments, which reassures investors and stakeholders about the reliability of the debt.

Other factors such as tax revenue projections, federal approval, and investment income stability are relevant in the broader context of financial planning and management, but they do not serve as prerequisites in the same direct way. Tax revenue projections help in understanding future income, federal approval might be specific to certain types of funding or programs, and investment income stability relates to the government's ability to fund operations long term. However, the balanced budget requirement is foundational and must be satisfied as a prerequisite to issuing debt.