FINANCING CAPITAL PROJECTS - 6841

(Revised and Renumbered from 6870.)

Capital projects may be funded by direct appropriation—sometimes called “pay-as-you-go”—or financed over multiple years.  Long-term financing generally follows one of two paths:

1. If the project authority is a General Obligation (GO) bond appropriation, the state issues GO bonds to finance the project.  GO Bonds are approved by voters with debt service paid through the General Fund.
   
   
2. If the project authority is a Public Buildings Construction Fund (lease-revenue bond) appropriation, lease-revenue bonds are issued by the State Public Works Board.  Debt service is paid through a support appropriation in the annual Budget Act.  Lease revenue bonds are not approved by the voters, and are secured through the lease payments made by the departments pursuant to a facility lease.