§ 808 Public Corporation Bond Limits

• •Local governments in California can borrow money by selling bonds (like IOUs) to pay for big projects.
• •They can raise taxes to pay back these bonds, but there’s no limit on how much tax they can charge.
• •However, the total debt (including overlapping debts from other governments) can’t be more than 25% of the value of all the taxable property in the area.
• •The value of the property is based on the latest official county records.

A small town in California wants to build a new school but doesn’t have enough money.

The town can sell bonds to get the money, but it has to make sure that the total debt (including any debts from the county or other local agencies) doesn’t go over 25% of the value of all the houses and businesses in town. If it does, they can’t borrow more.