Anne Arundel Maintains AAA Credit Rating Ahead of Bond Sale

Anne Arundel County continues to earn top marks from Fitch Ratings, which this week reaffirmed the County’s AAA credit rating in advance of a planned $107.39 million bond sale.

The rating applies to both the County’s general improvement and water/sewer refunding bonds, reflecting its prudent fiscal stewardship and resilient economic base.

The AAA rating — Fitch’s highest — ensures the County can borrow at the most favorable interest rates, reducing costs for significant capital projects and maximizing the impact of taxpayer dollars.

What’s Behind the AAA Rating?

Fitch cited several factors contributing to its decision:

Strong Financial Cushion

Anne Arundel County’s fiscal 2024 unrestricted fund balance stood at 22.2% of spending, well above its 8% policy threshold and well within Fitch’s expectations to maintain reserves at or above 10%. This healthy financial cushion is crucial for navigating economic shifts.

Reliable Revenue and Prudent Budgeting

The County scored a “High Midrange” in budgetary flexibility, with Fitch noting strong revenue controls and a long record of maintaining healthy reserves. Even during the Great Recession, the County’s three-year revenue drop (4.5%) outperformed the median for similarly rated governments.

Economic Fundamentals Remain Strong

Fitch again ranked Anne Arundel County’s demographic and economic indicators in the “Strongest” category, citing low unemployment, high educational attainment, and median household income nearly 50% above the national median. Federal assets, such as Fort Meade and the NSA, continue to anchor the local economy’s strength.

Debt and Pension Liabilities Are Manageable

While Fitch flagged a “Midrange” long-term liability burden, the County’s debt and pension obligations remain moderate relative to its economic resources. Overall, carrying costs (13.9% of expenditures) and liabilities to income and revenue align with national peers.

Areas to Watch

As with last year’s review, Fitch pointed to a “Weak” population growth trend as a potential long-term concern. Continued demographic stagnation, or a sustained increase in debt and liabilities, could pressure the rating in future years. Still, the County’s strong fundamentals provide a solid foundation.

What’s Next?

The County’s upcoming bond sale, scheduled for July 14, will refund existing general improvement and water/sewer bonds, lowering interest costs and freeing up revenue for other priorities.

Read the complete Fitch analysis for more information.

Two Sides, Same Coin: Balancing State Policy and County Budgets

Anne Arundel County’s reaffirmed AAA rating by Fitch underscores the critical link between sound fiscal management and state policy frameworks.

At the MACo Summer Conference session, “Two Sides, Same Coin: Balancing State Policy and County Budgets,” budget experts will explore how state income tax policy shapes the local capacity to sustain healthy reserves, invest in infrastructure, and deliver essential services — the very fundamentals that underpin top-tier credit ratings.

MACo’s Summer Conference, “Resilient. Responsive. Ready.,” is August 13-16, 2025, at the Roland Powell Convention Center in Ocean City, Maryland. This year’s theme is “Funding the Future: The Evolving Role of Local Government.” For more information, please visit the conference website.

Learn more about MACo’s Summer Conference: