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General Obligation Bonds

General obligation (GO) bonds are debt instruments issued by public agencies to raise funds for capital construction and other public works projects. GO bonds are backed by the full faith and credit of the issuing municipality, and generally the interest earnings that accrue to bond holders are exempt from personal income taxes. GO bonds are backed by the issuing agency’s taxation capability, making them different from revenue bonds, which are repaid using revenue from the project they were used to fund. This entry discusses GO bonds and how they are used to help finance public works projects, in particular school construction and renovation. It also describes the relative advantages and disadvantages of these instruments.

While the bulk of expenditures made by school districts are for ongoing ...

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