Financial Ratings Firm: Outlook 'Negative' in Pr. George's
Just days after Prince George's County announced plans to lay off up to 125 employees in response to funding cuts from the state, one of the major Wall Street ratings firms released a report saying the outlook in Prince George's County has gone from "stable" to "negative."
The report by Fitch Ratings, released late last week, echoes the arguments made by county officials for not tapping their $182 million rainy-day fund. Officials say raiding the rainy-day fund might cause Wall Street to lower the county's bond rating--similar to a personal credit score for an individual. That could force the county to pay millions of dollars more in interest on borrowed money.
But while the outlook worsened, Fitch did not change the county's actual bond rating of AA+, a rating which reflects the county's "limitations on increasing the real property tax rate, solid though declining reserves...and moderately low debt levels," the report states. The report listed "failure to preserve adequate reserve levels" as something that could trigger a ratings downgrade in the future. (See below for full report.)
Unlike Standard & Poor's, Fitch has not bestowed the coveted AAA rating on the county.
Though the county has spent down other reserves, it has refrained from using any money from the rainy-day fund.
September 28, 2009; 2:53 PM ET
Categories: Jonathan Mummolo , Maryland State Budget , Prince George's County
Save & Share: Previous: O'Malley Helps Deeds Raise Money
Next: Pr. George's County Executive and President of Ghana Do Lunch
Posted by: commonsense101 | September 28, 2009 4:36 PM | Report abuse
The comments to this entry are closed.