In a compact, what does the term "financial obligations" most closely relate to?

The term "financial obligations" in the context of a compact primarily refers to the liabilities incurred by a state. A compact is an agreement between two or more states, often addressing issues that require cooperative management and funding, such as education, transportation, or environmental concerns. Financial obligations indicate the responsibilities that a state undertakes as part of the agreement, which can include budgets, costs associated with implementing the compact, or other financial commitments.

In this context, understanding that financial obligations are associated with the debts and commitments required to fulfill the terms of a compact is essential. This can involve the need for states to allocate resources, adhere to agreements, and manage their financial responsibilities effectively to ensure the compact's goals are achieved. In contrast, elements such as grants, fiscal benefits, or compliance incentives represent different aspects of the financial landscape but do not directly define the concept of financial obligations inherent to the agreement between the states.