what is a general obligation bond, anyway?
A. A general obligation bond is a bond sold by the Commonwealth of Virginia to investors to raise money, in this case for capital construction projects. Requiring approval by referendum before they are issued, these general obligation bonds are backed by the “full faith and credit” of the Commonwealth. Debt service will be paid from the general revenues of the Commonwealth; in fact, a certain amount each year is already dedicated to repaying the debt on general obligation bonds the state has issued. Issuance of these bonds is not expected to increase the debt service above levels that are already regularly appropriated. The state’s debt capacity is such that there is room to issue the additional bonds without affecting the state’s bond rating and without requiring an increase in state taxes. Q. How will the state be able to afford the debt service to pay off the bonds, given the current budget crisis? A. When all of the bonds are sold, which is projected to be by 2009, the debt service
