Bonds can stretch out payments for new projects over a period of fifteen to thirty years.
State and local governments repay this debt with taxes, fees, or other sources of governmental revenue. Since most government bonds are tax-exempt, bondholders are generally willing to accept a correspondingly lower rate of return on their investment than they would expect on a comparable commercial bond. Bond financing, therefore, can often provide State and local governments with low-interest capital. Bonds, EPA's Guidebook to Financial Tools Introduces the fundamentals of bond issuance to generate revenues for municipalities. Discusses advantages and disadvantages and reviews sixteen types of bonds with information for further learning.