The amount of borrowing shall not exceed which of the following?

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Multiple Choice

The amount of borrowing shall not exceed which of the following?

The key idea here is that a municipality’s borrowing limit is tied to the revenues available to support debt service, not just the property tax levy. The limit is set by taking the previous year’s levy and adding other reliable revenue sources that help fund debt payments. The best answer reflects including both motor vehicle excise and in-lieu of tax payments received, in addition to the prior year’s levy. This captures the full base of funds the town actually collects to back debt, not just the property tax levy alone. The phrase “in-lieu of tax payments received” means the actual cash PILOT receipts, not just potential amounts, are counted toward the borrowing limit. For example, if last year’s levy was 1,000, plus 100 from motor vehicle excise, plus 50 PILOT receipts, the borrowing cap would be 1,150. Choices that omit one of these revenue streams would understate the limit and unrealistically restrict borrowing.

The key idea here is that a municipality’s borrowing limit is tied to the revenues available to support debt service, not just the property tax levy. The limit is set by taking the previous year’s levy and adding other reliable revenue sources that help fund debt payments.

The best answer reflects including both motor vehicle excise and in-lieu of tax payments received, in addition to the prior year’s levy. This captures the full base of funds the town actually collects to back debt, not just the property tax levy alone. The phrase “in-lieu of tax payments received” means the actual cash PILOT receipts, not just potential amounts, are counted toward the borrowing limit.

For example, if last year’s levy was 1,000, plus 100 from motor vehicle excise, plus 50 PILOT receipts, the borrowing cap would be 1,150.

Choices that omit one of these revenue streams would understate the limit and unrealistically restrict borrowing.

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