One downside of using federal funds for capital projects is:

Utilizing federal funds for capital projects often comes with long-range restrictions on property use, making this the correct answer. Federal funding typically involves compliance with various regulations and stipulations that dictate how the funded projects must be utilized over time. This can include restrictions on the types of activities that can be conducted on the property, required maintenance standards, or mandates regarding how the property must be operated to ensure it serves the intended public purpose.

These long-range restrictions can complicate local management of the property and limit flexibility in adapting to changing community needs or priorities. As such, while federal funds can provide necessary capital for projects, the accompanying regulations can deter local governments from pursuing this funding if they are concerned about the long-term implications of these limitations on property use.

The other choices present benefits or characteristics that do not align with the downsides of using federal funds for capital projects. For example, the guarantee of long-term funding and an even distribution of tax burdens are generally positive aspects, while the absence of administrative requirements runs contrary to the reality that federal funding typically comes with considerable administrative oversight and reporting obligations.