Overlapping Debt

Definition - What does Overlapping Debt mean?

Overlapping Debt is the portion of another taxing authority’s debt that a municipality is responsible for.

Testopedia explains Overlapping Debt

When a town resides within a county, the county may issues a general obligation bond for which the town is required to repay a portion of the outstanding debt. This is known a overlapping debt. Overlapping debt may also be issued by a neighboring town when both towns receive the benefit of the project such, as a water authority.

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