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Howard County maintains AAA bond rating for 22nd year

For the 22nd year in a row, Howard County clinched a AAA bond rating from all three of the nation’s credit-rating agencies, allowing the county to maintain low interest rates when repaying bonds.

Howard County Executive Calvin Ball and other county employees traveled to New York City earlier this month to meet with the three agencies — Moody’s, Standard & Poor’s, and Fitch — so they could assesses the county’s fiscal policy, tax base, management and debt.

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In published reports, all three agencies cited the county’s affluent tax base and its proximity to Baltimore and Washington, D.C., as reasons for the positive rating.

At least 43% of Howard’s revenue comes from property taxes, 26% comes from income tax and the rest from other local taxes including fines and costs for licenses and permits, according to the fiscal 2020 proposed budget.

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One of the agencies said the rating could be affected by a “material increase in debt burden resulting in strained financial position.”

Howard County is facing several necessary capital projects that could put a strain on future budgets. Replacing the 175-year-old courthouse is expected to cost $300 million over 30 years, as well as a soon-to-be announced Ellicott City flood mitigation plan that could cost as much as $175 million, could potentially place pressure on the budget if officials cannot find other revenue outlets.

Statewide, Howard County had the largest population growth over the last eight years, according to the U.S. Census Bureau’s annual population estimates released Thursday.

Officials have yet to find a sustainable funding source for the flood mitigation plan, Ball acknowledged during a press conference earlier this month.

The county currently holds about $169 million in general obligation bonds.

Of the $206.3 million capital budget proposed for this fiscal year, $89.8 million would come from general obligation bonds. Ball also proposed allocating $119.4 million toward debt payments.

The news comes one month after a Spending Affordability Advisory Committee’s 2019 report that warned officials the county its spending could soon outpace its revenues.

Of the more than 3,000 counties in the nation, Howard is one of 43 to have the high rating from all three agencies.

“Howard County’s AAA bond rating reflects the strength of our economy and our fiscal oversight,” Ball said in a statement. “Though we face tough financial decisions moving forward, our AAA rating shows that our credit is stellar, with low unemployment and a strong, diverse workforce.”

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