What characterizes General Obligation (GO) Debt?

General Obligation (GO) Debt is characterized by being backed by the full faith and credit of a municipality, which typically includes the ability to levy taxes. This means that the repayment of GO bonds is primarily secured by the revenue generated from taxing the residents or businesses within the jurisdiction. Because GO Debt relies on tax revenues, it is considered a very safe investment, as municipalities can adjust tax rates to ensure they can meet their debt obligations.

This characteristic differentiates GO Debt from other forms of debt, such as revenue bonds, which are secured specifically by the income generated from particular projects or services. General Obligation Debt reflects the taxpayers' commitment to fund government obligations and often requires voter approval to issue, underscoring the civic responsibility involved in managing communal finances.