SIE Exam Question 296: Answer and Explanation

Question: 296

The state of Texas is seeking to raise $500 million through the sale of general obligation bonds. Which of the following will support the repayment of the bond issue?

• A. Sales taxes.
• B. Property taxes.
• C. User fees.
• D. Ad valorem taxes.

Correct Answer: A

Explanation:

A: The debt service for general obligation bonds issued by the state is supported by revenue received at the state level. This revenue includes sales taxes and income taxes.