The GO debt limit as a percentage of assessed value is 2.5% for USD and 1.5% for non-USD. True?

The GO debt limit as a percentage of assessed value is 2.5% for USD and 1.5% for non-USD. True?

• A. True
• B. False
• C. Only for USD bonds
• D. Not specified

Answer: (A)

The key idea is how a general obligation (GO) debt limit is tied to the district’s tax base, measured by assessed value. In this policy, GO debt is capped as a percentage of assessed value, with two separate thresholds: 2.5% for debt issued in USD and 1.5% for debt issued in non-USD currencies. That means the statement is true because it matches exactly these defined limits. The higher limit for USD reflects the standard risk and market dynamics associated with USD-denominated debt, while the lower, more conservative limit for non-USD debt accounts for additional currency risk and administrative considerations. In short, the GO debt limit is indeed a percentage of assessed value, differing by whether the debt is USD or non-USD.

The key idea is how a general obligation (GO) debt limit is tied to the district’s tax base, measured by assessed value. In this policy, GO debt is capped as a percentage of assessed value, with two separate thresholds: 2.5% for debt issued in USD and 1.5% for debt issued in non-USD currencies. That means the statement is true because it matches exactly these defined limits. The higher limit for USD reflects the standard risk and market dynamics associated with USD-denominated debt, while the lower, more conservative limit for non-USD debt accounts for additional currency risk and administrative considerations. In short, the GO debt limit is indeed a percentage of assessed value, differing by whether the debt is USD or non-USD.