§ 16946 State Bond Debt Liability

• •The state promises to pay back money it borrows by selling bonds.
• •If the state borrows money with bonds, it must pay it back from the state's main money pot (General Fund).
• •If the state uses short-term loans (like bond anticipation notes), it pays them back with money from selling bigger bonds later.

Imagine the state needs money to build new schools, so it sells bonds to people.

The state must pay back that money from its big money pot (General Fund). If it takes a small loan to cover costs until the bonds are sold, it pays that small loan back with the money from selling the bonds.