Howard County earned a AAA bond rating this year from the country’s three credit-rating agencies, one of 43 counties nationwide to receive the top rating.
The three agencies, Fitch Ratings, Moody’s Investor Services and Standard & Poor’s, annually rate local jurisdictions’ credit quality, an indication of its financial strength.
County Executive Allan Kittleman, who in recent weeks has talked publicly about the county’s tough budget season ahead, said he was pleased by the rating and the county’s sound finances.
“[The bond agencies] just have such great respect for Howard County,” Kittleman said.
The three bond agencies each released a report detailing why they gave the county a AAA rating, but only Moody’s Investor Services outlined specific weaknesses in the county’s financial outlook, including the county’s reliance on the U.S. government for employment and its growing debt burden. Moody’s report did not specifically state what debts this includes.
These are both issues that were mentioned in the Spending Affordability Advisory Committee’s 2018 report, in which it said that companies in the county who work on government contracts could see a stall in business if the federal government pulls back spending and that it was concerned by the school system’s deficit, set to reach $50 million by summer.
Kittleman said he is not concerned about any possible effect the school system’s financial woes could have on the government’s bond rating, which is also a factor in setting interest rates for borrowing for major projects.
The school system’s deficit, caused by an imbalance in its employee health and dental fund, is separate from the county government’s employee health fund.
The Board of Education approved its $906.8 million budget proposal earlier this month, including an added $50 million request to pay back its debt. Kittleman this week called the $50 million “unrealistic,” but said that Superintendent Michael Martirano’s $850.7 million budget request “sound;” he said he was not prepared to say whether he would be able to fully fund the school system’s request.