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Most local governments have capital and infrastructure needs that exceed the size of their capital budgets. To meet those needs, many jurisdictions finance major capital projects by issuing debt. When used appropriately, debt can serve as an effective fiscal policy instrument by matching streams of costs and benefits related to a capital asset throughout its useful life. Stretching out the burden of financing long-lived assets promotes equity among generations of taxpayers and helps to maintain stable tax rates. However, excessive reliance on debt, especially if it is used to finance operating expenditures, is often the first sign of fiscal strain. In short, debt is a ...