the state has to decide whether to fund a proposal to repair roads or a proposal the would increase funding for new schools

To increase funding for new schools.

Explanation:

The state has to decide to fund a proposal to increase funding for new schools instead of a proposal to repair roads because schools are very important for the development of the society. More schools means more educated people in the society and more educated people in the society makes the country and the society more developed. Repairing roads also a requirement but schools are more important.

your answer would be (b)