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Buy nowI wasn't sure and so I tried it out.
RE: Can we budget by class?
Yes.
RE: Can we report on each class that would show P&L for each class?
Not quite sure I understand the question, but once you have created a budget by account and class, you can create a Budget v Actual report using that budget, several actually, that show different views of the budget.
RE: Can we get a report by class that shows what the actual income & expense is for that class AND the appropriate budgeted amount for each GL item?
Yes. Here's an example - created after setting up the budget by class for one income account as a test.
As you start to create a Budget vs. Actual report, pick Account by Class:
The result, by account and class for the reporting period: