General obligation bond
A general obligation bond is debt that is backed by a state or local unit of government. The unit of government that issued the bond if obligated to pay the principal and interest costs on such bonds. Typically, the general budget or general fund of the unit of government that issued the bonds is used to pay these costs. When a unit of government issues a general obligation bond, it is pledging the future tax revenue from the taxpayers it has the authority to tax to pay off the costs of the bond.
- See also: Statewide bond propositions (California)
As of January 2010, California has a total bond debt of $89 billion from previous bond issues approved by the state's voters. The state makes yearly debt payments of about $10 billion on its $89 billion debt load.
Public works projects in California worth hundreds of millions of dollars may be jeopardized starting in the summer of 2010 because of California's continuing fiscal crisis. California's treasurer said in late January 2010 that a long-standing political dispute over the state's $20 billion deficit could keep California from selling enough bonds in time to pay for ongoing projects.
California attempted to sell $4.4 billion of bonds in the fall of 2009, but was unable to sell all of it and, as a result, "millions earmarked last year for affordable housing and land acquisition...never materialized."