§ 53178 Bond Proceeds Tax Exemption

• •Money from selling bonds (like borrowing money) is not the same as tax money.
• •This money can be spent without following the usual tax money rules.
• •This rule was made because people voted for it in 1988.

Imagine your school wants to build a new playground but doesn’t have enough money. So, they borrow money by selling bonds (like IOUs).

The money they get from selling these bonds doesn’t have to follow the same strict rules as money from taxes. This means they can use it more freely for the playground.