General Obligation Bond
A municipal bond backed by the full faith, credit, and taxing power of the issuing government.
What is GO Bond?
A general obligation (GO) bond is a type of municipal bond backed not by a specific revenue stream but by the full taxing authority of the issuing government — typically a state, city, or county. Because the issuer can raise taxes if needed to repay bondholders, GO bonds are generally considered the safest form of municipal debt and typically receive higher credit ratings and lower yields than revenue bonds. GO bonds are used to fund general public needs such as schools, public buildings, and infrastructure. Voter approval is often required before a government entity can issue GO bonds.
Example
In November 2022, New York City voters approved a $4.2 billion general obligation bond measure to fund capital improvements to public schools, parks, and libraries. Investors in these bonds rely on NYC's ability to raise taxes on its $1+ trillion economic base to ensure repayment, rather than depending on revenue from any specific project.