Georgia Constitution Practice Exam

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Study for the Georgia Constitution Test. Dive into multiple-choice questions with hints and explanations. Prepare for your exam and gain confidence in understanding the Georgia legislative framework!

Practice this question and more.

What type of obligation is indicated not to be included in the debt limitations for a city or county?

General obligation bonds
Revenue bonds
Industrial bonds
Special bonds

The correct answer is: Revenue bonds

Revenue bonds are not included in the debt limitations for a city or county because they are secured by specific revenue sources rather than the general taxing authority of the local government. This means that the repayment of revenue bonds relies on the income generated from a particular project or service, such as utilities or toll roads, rather than from general tax revenue. As a result, these bonds do not impact the overall debt capacity that is calculated based on the general obligation bonds, which are viewed as having a higher risk since they are backed by the government's ability to levy taxes. In contrast, general obligation bonds are subject to strict debt limitations because they are backed by the full faith and credit of the issuing municipality, potentially exposing the entity to greater financial risk. Other types of bonds, such as industrial or special bonds, also tend to be assessed differently under debt limitations due to their specific purposes or revenue sources, but revenue bonds distinctly benefit from this exemption due to their unique structure and financing source.