It depends on the interest rate at the time the bond is secured. Right now, interest rates are low so many feel that this is a good time to use bonds to secure funding. In addition, because state bonds are tax deductible under federal law, the interest on state bonds is lower than on the bonds issued by other entities with similar risk.

Revenue bonds tend to fund specific programs or projects that will eventually bring in revenue – such as the building of toll roads, water and sewage facilities, airports, etc. The idea is that the money provided to these programs will eventually be repaid through fees and charges to the facility users. General obligation bonds are backed by taxing authority of the issuer, not by a revenue stream created by the project being financed.

Well, the state could use a larger share of its annual general fund revenues to fund building or renovation. Of course, that also would necessitate cutbacks in other areas. If there is only so much money available at any given point, you either raise taxes, cut services and programs, or you do both. Nevertheless, whether you use bonds or general fund revenues, the taxpayer foots the bill if the bond is a general obligation bond. The taxpayer obligation is just postponed to pay over a longer period of time.