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Debt capacity analysis for local governments.

Most local rules have capital and infrastructure extremitys that exceed the size of their capital packs To meet those needs, many jurisdictions finance major capital casts by issuing debt. When used appropriately, due can serve as an effective fiscal policy instrument through matching streams of costs and benefits related to a capital asset quite through its useful life. Stretching on the outside the burden of financing long-lived assets aids equity among generations of taxpayers and helps to maintain stable tax rates. However, excessive reliance upon debt, especially if it is used to finance operating expenditures, is frequently the first sign of fiscal strain.


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