Municipal Bonds Revenue Sources

General obligation and revenue bonds differ in the sources of cash flows that will be responsible for repaying the investors who provide the capital to issue the bonds.

Municipal bonds revenue sources. The first is known as general obligation bonds go and the second is known as revenue bonds. For example municipal entities frequently issue securities on behalf of other borrowers such as non profit colleges or hospitals or certain for profit entities. Toll taxes are the main sources of revenue for these bonds. College and university revenue bonds fund the construction of centers of higher learning such as colleges and universities.

A revenue bond is a category of municipal bond supported by the revenue from a specific project such as a toll bridge highway or local stadium. Long term revenue growth although local government revenue was about the same relative to gross domestic product in 1977 8 6 percent and 2017 8 7 percent it has fluctuated over the period figure 3. Cannabis municipal bonds could be a great source of revenue submitted by marijuana news on mon 05 11 2020 10 44 as the growth in covid 19 cases accelerates quickly in the u s the pandemic will gravely impact public health across the world and cause a significant slowdown in the world economy. While we remain positive on the long term prospects for most revenue bond sectors those backed by utilities such as water sewer and electric enterprises may prove to be the safest and most stable municipal bonds in the short and long term.

There is a wide diversity of types of revenue bonds each with unique credit characteristics. Bondholder security can include tuition payments dormitory room rental fees and fines as well as the general assets of the college or university. Revenue from charges fees and miscellaneous sources increased from 15 percent to 23 percent in 1985 and has remained roughly at that level since then figure 2. A municipal bond is issued by a state or local government to raise capital to fund projects such as highways sewage systems hospitals recreational parks public schools etc.

Municipal bonds generally can be classified into two camps general obligation bonds and revenue bonds. The basics of budgeting revenue sources budgeting revenue sources borrowing depositories and investments the thirteenth annual riley fletcher basic municipal law seminar austin texas friday y y 4 february 24 2012 kuruvilla k o oommen deputy city attorney city of irving texas. Generally speaking there are two categories of municipal bonds. Revenue bonds are backed by revenues from a specific project or source.