Prince George's AAA Rating, a Major Asset
James Wright | 6/8/2011, 9:14 p.m.
A Washington-area county has scored a major victory in the eyes of the business world and its residents by maintaining a superior bond rating on Wall Street.
On Fri., May 27, Fitch Ratings of New York announced that Prince George's County bonds were "AAA" rated in the course of review, the highest possible bond score a jurisdiction can receive. The rating is the same that the other ratings firms- New York's Standard & Poor's and Moody's- have given the county and the news pleased Prince George's County Executive Rushern Baker III.
"For Prince George's County to receive a 'AAA' bond rating from all three ratings houses sends a clear signal to the investment and development community both domestic and abroad that this county is the place to do business," Baker, 52, said.
"Since taking office, this administration has prioritized prudent fiscal management, wise investments such as the proposed $50 million Economic Development Incentive Fund and targeted transit-oriented development around our Metro sites. With this news, we must properly market and communicate to the business community that Prince George's County is a great investment to create more jobs and opportunities for our residents."
Fitch Ratings, in its press release, said that analysts' rationale for the county's outstanding credit rating was "the county's central location in the national capital region and its well-developed transportation infrastructure, attracting a strong base centered upon vital government operations and higher education."
The release said that "prospects for continued growth are strong, as several major commercial and residential developments are underway" and "debt levels are low and are expected to remain so over the next few years given the county's moderate capitals needs and plans for additional debt."
Stephen Fuller, a well-respected economist at George Mason University in Fairfax, Va., said that the "AAA" bond rating is a boon to the county.
"The 'AAA' bond rating allows the county to borrow money at the lowest possible interest rate and that will be important because interest rates are expected to climb in 2013 and beyond and the county could negotiate to lock in today's interest rates, which are low," Fuller, 71, said. "The excellent bond rating will save taxpayers money in a few years when the interest rates go up, as is expected."
Fuller said that the superior bond rating will help the county's reputation because of recent highly-publicized scandals, such as the arrests of Jack Johnson, the former county executive and his wife, Prince George's County Council member Leslie Johnson (D-District 6).
"It is external validation and shows the county's excellent condition despite anything else that Jack Johnson's situation or the high home foreclosure rate may show," he said. The county's books are in great shape. Prince Georgians should be proud of this."
County residents have responded positively to the news.
"I am extremely happy about the bond rating," Arthur Turner, a political and civic activist, said. "This will help us to look to the future and to the progress of the county."
The rating is expected to help the county finance bonds that will help build such development projects like Konterra Town Center East in Laurel and National Harbor in National Harbor, Md. The bonds will pay for roads and other infrastructure needs."
Turner, 52, said that the rating will "help us to get money to pay for schools, teachers, fire, Emergency Medical Services professionals, police and to build new roads."
"This rating will help open doors and bring corporations into Prince George's County," Turner, a resident of Kettering, said.
Taras Brown is also pleased with the "AAA" bond rating but has reservations.
"It is good for the county's image but are the residents going to see the benefits? Brown, 47, asks. "How will this bond rating help our county, particularly low-income residents? How is the school system being helped, with all of the cutbacks that are taking place?"
Brown, a resident of Fairmount Heights, said that individual public schools are cutting back on activities for the students and in some cases, there may be a charge assessed for participation in sports.
"Don't get me wrong, a good credit rating is a good thing for the county," he said.
"The county looks beautiful and clean but the question is how will this rating help the residents who are struggling to live?"