GENERAL OBLIGATION BONDS
Municipalities, counties, school districts and other political subdivisions, have historically issued general obligation or similar unlimited tax bonds for the purpose of financing capital improvements. The obligation of such political subdivisions to pay the principal of and interest on general obligation bonds is secured by a pledge of the ?“full faith and credit?” of the issuing political subdivision. The bonds are typically secured by irrevocable covenants to levy and collect ad valorem property taxes, without limitation as to rate or amount, upon all taxable property in the political subdivision until the principal of and interest on such general obligation bonds are paid in full. The issuance of general obligation bonds is generally required to be approved at an election because, through the issuance of general obligation or unlimited tax bonds, the governing body of a political subdivision unconditionally commits future governing bodies and future taxpayers to pay the principal of and interest on such obligations.
Municipalities, counties, school districts and other political subdivisions, have historically issued general obligation or similar unlimited tax bonds for the purpose of financing capital improvements. The obligation of such political subdivisions to pay the principal of and interest on general obligation bonds is secured by a pledge of the ?“full faith and credit?” of the issuing political subdivision. The bonds are typically secured by irrevocable covenants to levy and collect ad valorem property taxes, without limitation as to rate or amount, upon all taxable property in the political subdivision until the principal of and interest on such general obligation bonds are paid in full. The issuance of general obligation bonds is generally required to be approved at an election because, through the issuance of general obligation or unlimited tax bonds, the governing body of a political subdivision unconditionally commits future governing bodies and future taxpayers to pay the principal of and interest on such obligations.
