• Overlapping debt is when the debt issued to finance the activities of the government falls on several political jurisdictions, while the joint debt is distributed among them.

  • Overlapping debts are quite common among various levels of local government in the US with special boroughs and fiscal agencies for things like schools and public infrastructure that overlap with multiple municipalities.
  • The amount of overlapping debt can affect the cost of borrowing and the credit rating of the municipal government.
  • The use of overlapping debt and fiscal bodies tends to bias local government towards higher total spending, total debt, and a higher tax burden.