What distinguishes a general obligation bond from a Mello-Roos district financing?

• A. General obligation bonds are repaid from general funds or property taxes; Mello-Roos funds are raised through a special tax levy for facilities and related costs.
• B. GO bonds are funded by federal grants; Mello-Roos by private donations.
• C. GO bonds are repaid by state-wide pool; Mello-Roos repaid by student fees.
• D. GO bonds require voter approval; Mello-Roos does not.

Answer: (B)

General obligation bonds are backed by the issuer’s taxing power and are repaid from general funds or property taxes. Mello-Roos district financing, created as a community facilities district, is funded instead by a special tax levy on property within the district to pay for facilities and related costs. Federal grants or private donations don’t play the typical role in backing GO bonds, and Mello-Roos debt isn’t repaid from a state-wide pool or student fees. The key distinction is the source of repayment: general taxes for GO bonds versus a dedicated CFD special tax for Mello-Roos.