Debt vs Pay-As-You-Go represents a fundamental policy debate about how to finance municipal infrastructure. Pay-as-you-go (PAYG) involves funding capital projects from current revenues, reserves, or grants without borrowing—avoiding interest costs but potentially delaying needed investments until sufficient funds accumulate. Debt financing allows immediate construction but commits future budgets to repayment. Arguments for debt include matching costs to asset lifespan (intergenerational equity) and building infrastructure when needed rather than decades later. Arguments for PAYG include avoiding interest costs, maintaining financial flexibility, and reducing risk. Most municipalities use a mix, with debt for major long-lived assets and PAYG for smaller projects or asset types. The right balance depends on infrastructure needs, financial capacity, interest rates, and risk tolerance.