County Among Best in Nation for Fiscal Responsibility
County Executive Ike Leggett today announced that Montgomery County has maintained its Triple-A bond rating for 2015 from three Wall Street bond rating agencies.
Fitch, Moody’s, and Standard & Poor’s all affirmed the “AAA” rating – the highest achievable — for the County. They all termed the outlook for Montgomery County as “stable.”
The Triple-A bond rating enables Montgomery County to sell long-term bonds at the most favorable rates, saving County taxpayers millions of dollars over the life of the bonds. The rating also serves as a benchmark for numerous other financial transactions, ensuring the lowest possible costs in those areas as well.
“What is remarkable about this is that Montgomery County has continued to receive a Triple-A bond rating from all three bond rating agencies even during these past few years when other jurisdictions – including the federal government – were seeing downgrades and despite federal shutdowns, budget sequestrations and the worst economic downturn since the Great Depression,” said Leggett.
“Our ability to maintain our coveted Triple-A rating affirms my approach to putting the County’s fiscal house in order and reducing unsustainable increases in County spending, while investing in making government more effective and creating opportunities for the growth of good jobs in the future.
“We have significantly boosted our reserves, closed more than $3 billion in budget gaps, made tough choices on spending, and saved millions for taxpayers with changes in County health and retirement benefits. Our unemployment rate is the lowest in the state of Maryland and among the lowest in the nation. Montgomery County has weathered the downturn and the investments we made during the toughest of times are enabling us to create more jobs and opportunity.”
The bond rating agencies underlined the County’s successful approach.
“Montgomery County has a sophisticated management team that uses conservative budgeting and has established debt and reserve policies that have resulted in healthy reserve and liquidity levels,” wrote Fitch. “Montgomery County continues to exhibit a very impressive economic profile.”
“The AAA rating reflects the County’s sizable, strong and diverse tax base, affluent demographics, and manageable debt burden,” said Moody’s Investor’s Services. “The rating also incorporates the county’s healthy reserve position, which has grown in recent years as a result of the implementation of various new fiscal policies and a multi-year plan to restore the county’s financial flexibility.
“Several large projects are underway in the county and will add further to the tax and jobs base over the near and medium term, including a substantial $1.5 billion in building construction in Fiscal Year 2015 alone.”
“The stable outlook reflects our view of Montgomery County’s very strong local economy and its demonstrated resilience to economic pressure due, in large part, to its very strong management conditions,” said Standard & Poor’s.
“The reconfirmation of the County’s AAA rating reflects the strong commitment of the Council and Executive to sound financial management,” said Council President George Leventhal. “The County has held a AAA rating since 1973. This is an outstanding achievement, but it is what we expect of Montgomery County. It is further evidence that we have jointly created a government that works effectively for our one million residents.”
“I am pleased Montgomery County has retained its AAA Bond Rating. This accomplishment is due in large part to the County Council and County Executive working collaboratively to put in place responsible fiscal policies,” said Government Operations and Fiscal Policy Committee chair Nancy Navarro. “During the Great Recession, the Council established a six-year Fiscal Plan, restructured County employee benefits, developed a policy to increase our reserves to 10% by 2020, and took the unprecedented step of re-basing the school system budget. These actions, taken together with approving fiscally responsible budgets and land use plans that promote economic development throughout the County, have set the stage to retain our high credit rating. This bond rating allows us to borrow money at low costs so we can invest in essential infrastructure projects.”
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