Fitch Ratings has once again affirmed Anne Arundel County’s AAA credit rating, reflecting its solid financial management and robust economic performance. The County’s general obligation (GO), special obligation, and tax increment refunding bonds have all maintained their AAA rating and stable outlook.
This top-tier rating gives Anne Arundel County access to capital markets with the most favorable interest rates, reducing taxpayer costs and enhancing the County’s capacity to finance essential infrastructure projects.
Key Drivers of the AAA Rating
Several factors contributed to Fitch’s decision to reaffirm Anne Arundel County’s AAA credit rating:
Financial Resilience
Fitch highlighted Anne Arundel County’s high level of budgetary flexibility, supported by strong operating performance and reserves that consistently exceed 10 percent of spending.
The County’s unrestricted fund balance was 20.2 percent of expenditures in fiscal 2023, well above its 8 percent policy threshold. This financial cushion helps the County manage economic fluctuations effectively.
Stable Economic Base
Anne Arundel County benefits from a diverse and stable economy, bolstered by its proximity to Washington, DC, and the presence of critical federal installations like Fort Meade and the US Naval Academy.
Fitch noted that the County’s median household income and educational attainment levels are among the highest in the country, supporting strong economic growth.
Responsible Debt Management
Fitch emphasized the County’s moderate long-term liability burden and responsible debt and pension obligations management. Despite some upward pressure on liabilities, Anne Arundel County maintains a manageable debt load relative to its revenues, ensuring fiscal sustainability in the long term.
Challenges and Future Outlook
While Anne Arundel County’s overall financial position remains strong, Fitch did identify a few areas to monitor.
The County’s population growth has slowed in recent years, which could affect its economic trajectory if the trend continues. Additionally, any significant increase in the County’s long-term liability burden or a failure to maintain reserves above 10 percent of spending could negatively impact the rating.
However, Fitch expresses confidence in the County’s continued financial resilience, attributing it to prudent management and strong economic fundamentals.