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Despite fiscal cautions, Baltimore County retains top bond ratings

Baltimore County has again received top bond ratings from the three major rating agencies, despite concerns about an upcoming budget gap.

County officials announced Tuesday that Moody’s, Fitch Ratings and S&P Global Ratings each affirmed the county’s AAA ratings. The ratings help the county borrow money at low interest rates to finance construction of schools and infrastructure.

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Johnny Olszewski Jr. delivered an upbeat message on the campaign trail, promising a fresh approach to governing as Baltimore County executive. Now in office and facing a budget shortfall, he is traveling around the county telling a more sobering story.

County Executive Johnny Olszewski Jr. has said the county faces an $81 million deficit in the upcoming year. But the ratings agencies cite factors including the county’s strong economy and its fiscal management practices in assigning the AAA ratings.

“While the county's financial plan projects gaps in the coming years, we expect the county to close these gaps through a mix of savings and revenue initiatives,” states an S&P analysis issued last week.

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A Fitch analysis released Monday says the county “has strong revenue flexibility” because it could increase property and income taxes.

 
(Baltimore Sun Graphic)

Still, Moody’s says the county’s outlook remains negative, meaning its credit rating could be downgraded in the future. The agency last week pointed to factors including “plans to take on additional debt to finance its sizeable capital program that includes debt for schools, water and wastewater projects” in assigning the negative outlook.

Olszewski’s first budget proposal is due to the County Council in April. He hasn’t ruled out tax hikes, but has said they are “the last thing that we should turn to.”

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