Official Explanation
This question asks you to find the statement that most seriously undermines the reasoning in the argument. The argument consists of a state representative's response to criticism regarding the adequacy of their prison facilities. The attempts to counter this charge by changing the subject and saying that the state plans to allocate a lot of funds to the prison system in the next year. A statement that undermines this reasoning will suggest a way in which increased spending may not lead to adequate facilities.
Choice (A) presents unrelated information; we are concerned with the prison system in this state, not those in neighboring states.
Choice (B) suggests a reason why the prison facilities may be inadequate: if there has been a recent increase in felony convictions, then there may be more inmates than the system can handle. This appears to undermine the representative's argument insofar it shows that the critics were likely justified in calling the facilities inadequate. However, we don't know how the increase in felony convictions actually affected the total number of inmates in the system; without this additional information, the statement in choice (B) can have no effect on the argument.
Choice (C) shows a way in which increased spending may not lead to adequate facilities. If the state allocated large amounts of money to the system in the last few years, then it must be true that the state's prison facilities were inadequate. The discussion of funding should set alarm bells off because good funding does not equate with good results. In fact, this question raises the paradox that high funding might actually mean that the prisons are in dire shape and desperately need the money.
Choice (D) is irrelevant; the cost of maintaining other institutions is not in question.
Choice (E) has no effect on the argument; even if we agree that the state should not use their money in this way, a statement of opinion can have no bearing on an argument's logical structure.
Choice (C) most seriously undermines the representative's argument, and is the best choice.
Answer: C