General obligation (GO) bonds are a type of municipal bond issued by state or local governments and backed by the full faith, credit, and taxing power of the issuing jurisdiction rather than by revenues from a specific project. This means the government pledges to use all available resources, including the ability to levy property taxes, to repay bondholders

. Key characteristics of GO bonds include:

• They are secured by the issuer’s general taxing power, often property taxes, which can be increased if necessary to cover debt payments

• They do not rely on revenue generated from a particular project, unlike revenue bonds, but rather on the issuer’s overall creditworthiness and taxing authority

• There are two main types: limited-tax GO bonds, where tax increases are capped by law, and unlimited-tax GO bonds, where taxes can be raised without a statutory limit to meet debt obligations, usually requiring voter approval

• GO bonds are typically used to finance public projects such as schools, roads, parks, and other infrastructure that benefit the community

• Because property owners generally pay their taxes to avoid losing their property, GO bonds are considered to have strong credit quality and often receive high investment-grade ratings

In summary, general obligation bonds allow governments to raise funds for public projects by borrowing against their power to tax residents, ensuring repayment through broad-based taxation rather than specific project revenues