> "I don't understand how a small town can borrow against a state's future tax earnings?" states are the canonical units of governance in the US. towns/cities

> "I don't understand how a small town can borrow against a state's future tax earnings?" states are the canonical units of governance in the US. towns/cities have no budget or power on their own. that's all delegated from the state, analogous to allowing VP's access to their company's credit line. since it's (literally) a ward of the state, the responsibility for debts also fall on the state in cases of insolvency of the municipality. note that state and local muni bonds are the same thing--borrowing against a state's future tax earnings (often at great cost).