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Why is the answer E . It is clearly stated in E that the additional funds will be used in construction or remodeling of school buildings
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MrSengupta
Why is the answer E . It is clearly stated in E that the additional funds will be used in construction or remodeling of school buildings

Smith wants 3 new school and 2 roads, where as the funds are for construction or remodel king of school buildings.
So neither NEW schools are allowed nor construction of roads.
What is allowed is school buildings only?
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Official Explanantion

Situation:A lawmaker proposes to use state money to build more schools in outlying areas of County X, where roads are often closed due to flooding. The lawmaker's plans include proposals for both schools and more dependable roads. Reasoning:Which of the following is most damaging to the plan to build more schools? As the passage makes clear, the success of Representative Smith's plan depends on the ability to complete two different construction projects: new schools and new roads. If for any reason there will not be funding available for both of Representative Smith's projects, his plan will likely not succeed. (A) This option, though it demonstrates a lack of additional financing, does not present an obstacle to Representative Smith's plan as detailed in the passage. (B) This option may strengthen the argument for additional schools, but it does not directly address Representative Smith's plan. (C) The amount of revenue directed to other counties in State Y is not directly relevant to a plan for County X. (D) This option would actually strengthen Representative Smith's plan, because it would allow funds to be used for the construction of both schools and roadways. (E) This option correctly identifies the major shortcoming of Representative Smith's plan: if the state will not allow funds to be used for the construction of new roads, then the plan to build both new schools and new means of
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