The credit rating agency Fitch has affirmed Maricopa County’s AAA bond rating, lavishing praise on county management for “strong and historically prudent fiscal practices” that ensure “an exceptionally strong level of financial resilience throughout the economic cycle.”
Among the reasons listed for Maricopa County’s continued high rating: a moderate long-term liability burden; a growing, diverse economy that is expected to create additional revenue; a historically robust reserve cushion; and financial flexibility stemming, in part, from the county’s practice of taxing below maximum allowable rates.
“This rating is a point of pride for all of us on the Board,” says Chairman Denny Barney, District 1. “It means we’re doing the job we were elected to do: managing taxpayer resources wisely and ensuring that the county is in good financial shape, regardless of economic conditions.”
In a county growing so rapidly, a high bond rating means faster response to the increased demand for services, all at a lower cost to taxpayers. This rating allows Maricopa County to do more with fewer tax dollars because county bonds can be issued at lower interest rates.
“Maricopa County has a rich history of fiscal responsibility, and I intend to continue down that path as Chairman,” explains Barney. “By planning for worst case scenarios, and making smart, targeted investments that we know we can afford, we’ll ensure we are competitive in the short term and flexible in the long-term.”
Fitch issues two different ratings to government entities such as Maricopa County. The long-term issuer default rating (IDR) applies to situations in which the County is considering voter-approved, or General Obligation, debt. Maricopa County’s IDR is AAA, the highest possible. The second rating concerns certificates of participation (COP’s). These are County loans that are annually appropriated. Maricopa County had $185.6 million COP’s, series 2015, and these were rated AA+, the highest possible COP rating.
In short, Fitch ranks Maricopa County among the best of the best in terms of financial stability and the certainty that any debt the County carries will be repaid. Fitch describes the County’s fiscal outlook as strong and its rating outlook as stable, saying “Maricopa County typically outperforms its conservative budget and replenishes during times of economic expansion.”