Traditionally, municipalities depend upon property taxes to constitute the largest source of local governments’ own revenue. Charges, sales and gross-receipt taxes, individual income taxes and other revenues make up the remaining local general revenues. Due to the mismatch of revenue and expense timing, a municipality usually uses bond debt borrowing to facilitate local funding. Normally, municipal bonds can be purchased through an investment broker. However, municipalities may lawfully sell municipal bonds directly to the public via the Internet and potentially save money.
One of the primary purposes for municipal bonds is to allow governments to borrow money to finance capital projects without causing burdensome changes in tax rates, fees or other charges.
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