What is the function of 'CAP' in the municipal budget context?

In the municipal budget context, 'CAP' refers to a mechanism that limits the annual increase in property taxes. This control is essential for maintaining fiscal responsibility and ensuring that tax increases remain manageable for residents. By placing a cap on these increases, the local government can create a more predictable tax environment, which benefits both taxpayers and municipal planners. This allows municipalities to budget effectively while promoting transparency and accountability in their financial practices.

While establishing funding sources, regulating surplus funds, and determining employee compensation structures are important aspects of municipal budgeting, they do not directly relate to the specific function of CAP, which narrowly focuses on controlling property tax increases. Therefore, controlling annual property tax increases accurately reflects the primary role of CAP within the municipal budget framework.