Monmouth County Freeholder Amy H. Handlin reported on Aug. 5 that despite the lowering of the state’s bond rating by the three national bond rating agencies, Monmouth County’s Triple A rating will continue to save thousands of dollars for county taxpayers, county government and the various local governing bodies and school boards that benefit from the county’s high bond rating.
Last week, Moody’s Investors Service, Fitch Ratings and Standard and Poor’s each lowered the bond rating for the state of New Jersey. Moody’s lowered the state’s rating from Aa2 to Aa3. Standard and Poor’s and Fitch both lowered the rating from AA to AA- (AA minus). According to Handlin, who is the freeholder liaison to the Department of Finance in county government, the lower state ratings affects state government only and will have no bearing on the county’s ability to take advantage of lower interest rates.
The lowering of the state’s bond rating, taken after the state borrowed $2.4 billion to balance the $28 billion state budget, means the state will face substantially higher interest rates whenever it borrows in the future, according to a press release from the county.
In July 1999, Monmouth County became one of only a select few counties in the nation to earn the Triple A rating from all three of the established national rating agencies. The county earned its AAA rating from Moody’s in October 1996, from Fitch Ratings in August 1997 and from Standard and Poor’s in July 1999. The AAA rating is the highest rating that any governmental agency can achieve.
Just recently, the three rating services reaffirmed their Triple A ratings for Monmouth County and for the Monmouth County Improvement Authority (MCIA). The MCIA is used by local governing bodies and school boards to borrow funds using the county’s AAA rating.
"The Triple A rating is the highest rating given at the time of the sale of long-term government bonds. The higher the rating, the lower the interest rates at the time of sale. That translates into fewer tax dollars out of your pockets and mine," Handlin said. "I’m very pleased to say that the major bond rating services in the nation continue to give Monmouth County a Triple A rating for financial stability and fiscal management."
Moody’s Investor Service said it "expects Monmouth County’s financial outlook to remain positive … Conservative budgeting and a growing tax base has allowed county officials to keep property tax rates stable in recent years while adding to the fund balance."
Handlin added, "Our fund balance, or savings account, has increased in each of the last seven years and currently stands at a healthy 17.1 percent of revenues. This allows us in many instances to pay cash for items for which many others counties have to borrow and to maintain a stable tax rate."
Moody’s also reported that Monmouth County maintains "exceptional stability, strong financial performance and budgetary control, and a historically favorable debt position."
Handlin said she was especially pleased that local towns and school boards can still take advantage of the county’s very low interest rates by borrowing through the MCIA.
"A town council or a school board can use Monmouth County’s Triple A rating and save local tax dollars as well," she said.