Which of the following is an example of revenue source stability as a type of risk?

Revenue source stability refers to how consistently and reliably a revenue stream can be expected to perform over time. In the context of budgeting and financial management, having stable revenue sources minimizes risk and helps ensure that a government or organization can meet its financial obligations without unexpected fluctuations that could impact services.

Secure local tax revenues exemplify revenue source stability because they are typically predictable and consistent. Local taxes are often based on established tax rates and a stable tax base, providing a reliable and continuous stream of revenue. This stability is crucial for budgeting purposes, as it allows for better planning and resource allocation. Local tax revenues are less susceptible to sudden changes compared to other sources, like grants or volatile economic conditions.

In contrast, other options represent varying degrees of instability. Unpredictable grant funding is inherently risky because it can vary based on external conditions, such as changes in government policy or budget priorities. Dependable service fees can also fluctuate based on usage or demand, introducing uncertainty. Rising property values can suggest potential for increased revenue from property taxes but do not guarantee stability on their own, as values can also decline.

Thus, secure local tax revenues provide the most reliable example of revenue source stability, highlighting their importance in effective capital and operating budgeting practices.