A Wall Street bond rating company has given Prince George's County a boost.
For the second year in a row, one of the firms that evaluates the financial health of local governments has upgraded the county's bond rating, a move that could allow the county to borrow money at lower interest rates, potentially saving taxpayers millions in debt payments.
Fitch Ratings raised the rating for Prince George's from AA to AA+, the county's highest rating ever, officials announced yesterday.
"It tells us we're on the right course," said County Executive Jack B. Johnson (D). "There could not be a stronger validation for what we're doing."
Analysts said that despite a voter-imposed property tax cap and the limits placed on income tax increases by the state, Prince George's has continued to grow.
The county's tax base -- the total assessed valuation of property in Prince George's -- has increased from $48 billion in fiscal 2005 to $54 billion in fiscal 2006.
"Prince George's has successfully built and maintained fiscal reserves through up-and-down economic cycles," said Joseph D. Mason, a Fitch analyst. "It demonstrates that they can manage their money within their means."
The county's fiscal picture is expected to improve as commercial, residential and retail projects, such as National Harbor, a development on the Potomac, and M Square, a 120-acre research project run by the University of Maryland, move forward, according to analysts.
Johnson said the county has been "unduly penalized" in the past by bond rating companies because of the property tax cap, which was set in 1978.
Even with the cap at 96 cents per $100 of assessed value, the county has experienced a 6.7 percent increase in property tax collections. In addition, he said, the county raised $95 million from increases in new taxes, including the school surcharge, 911 service fees, telecommunications and building permits.
Tom Himler, the county's budget director, said Moody's Investor's Service, which uses a slightly different terminology in its ratings, upgraded the county from Aa3 to Aa2 last year. Moody's kept the rating at the same level this year. Standard & Poor's, the other bond rating company, also kept Prince George's at a AA rating. The Aa2 and AA ratings are equivalent.