General Obligation (GO) Bonds

What this video covers

• What full faith, credit, and taxing power actually means, and why general obligation (GO) bonds require voter approval while revenue bonds do not
• The difference between unlimited tax GO bonds (no rate cap, lower risk) and limited tax GO bonds (capped rate, higher risk)
• Why unlimited refers to taxing power, not borrowing power, and how legal debt limits still constrain total issuance
• The key factors analysts use to assess a GO issuer's ability to pay: tax base size, population trends, economic diversity, per capita income, unfunded pensions, and collection rates
• What overlapping debt is, which entities count (city, county, school district), and why state debt is always excluded from the calculation
• How to calculate net debt by subtracting self-supporting revenue debt from total debt, and what net debt to assessed valuation and net debt per capita actually measure
• Why declining population is a double credit hit: it shrinks the tax base and raises per capita debt burden simultaneously