PAYGO means pay-as-you-go financing.
In the capital budget, PAYGO uses current revenue for capital costs instead of using debt for those costs. It can reduce borrowing and future interest costs, but it also uses money that affects annual operating resources.
PAYGO is one reason the operating budget and capital budget can touch even when no new borrowing is involved.
Why It Matters
PAYGO can reduce borrowing for capital projects, but it also uses current resources that could affect the annual budget.
Common Misunderstanding
PAYGO does not mean a capital project has no cost. It means the county is using current revenue rather than borrowing for that part of the project funding.