Net revenue available for debt service refers to the amount of municipal revenues from taxes or other sources that are available for debt service. Oftentimes, debt service payments represent a significant portion of a municipality’s total revenues over time.
For example, suppose that a municipality generates $100 million in revenue, but requires $75 million for payroll, refunds, and other commitments, with another $5 million put into a slush fund. The remaining $20 million could be net revenue available for debt service.