AAA Bond Rating: What It Means for Prince George's County

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This episode breaks down Maryland and Prince George’s County’s bond ratings from Moody’s, S&P, and Fitch. We explain the difference between AAA and Aa1 ratings, why it matters, and how the County can avoid structural budget deficits.

Episode Transcript

Speaker 1 (00:05):
Welcome to another episode of All Politics is Local
with me, your host, tamaraDavis-Brown.
I am back.
It's been a minute since I'verecorded an episode.
I had some caretakingresponsibilities as well as
seeing about my own health.
However, I've had lots of ideasto come across my desk to

(00:32):
discuss with you, and I'mfinally getting around to
recording some new episodes.
So first I want to share somegood news and say thank you,
thank you, thank you.
I got noticed that All Politicsis Local is in the top 80.
I made number 79 of civicengagement podcasts nationwide.

(00:58):
So nationwide we are in the top80, number 79.
And that's thanks to you forlistening and tuning in and
asking great questions andwanting to know about various
things that sometimes I can'tjust send an email about.

(01:19):
I just need to talk about it alittle bit.
So today we're going to go backa little bit in time because in
May of this year we found outthat both the state of Maryland
and Prince George's County weredowngraded in their bond rating

(01:41):
by one of three bond ratingagencies, which was Moody, and
so we're going to discuss thatand what happened, as well as
discuss some possible thingsthat the county can do and maybe
perhaps the state can do inorder to get its financial homes

(02:04):
in order.
So you may have heard the newsthat both Maryland, the state of
Maryland and Prince George'sCounty lost their AAA bond
rating by the bond rating agencyMoody.
However, there are three ratingagencies, not just Moody, but
also Standard Poor you may haveheard that term or hear S&P, as

(02:30):
well as Fitch.
Both Standard Poor and Fitchmaintained the AAA bond rating
for both the state of Marylandand Prince George's County, so
it was a mixed bag.
He had the majority to maintainthe AAA bond rating for the

(02:51):
state and the county, but Moodydowngraded its rating for both
the state and the county.
So what does this really mean?
As some of you may or may notknow, what happens when we go to

(03:13):
Wall Street to sell state andcounty or municipal bonds.
We sell them so that we canbuild capital improvement
projects such as your roadways,state highways, new schools, new
police and fire station all ofthe infrastructure projects that

(03:34):
we need in order to support usas residents of our state and
our county.
So we sell those bonds and wepay those bonds back with
interest and just like a regularcredit score.
The higher your credit score is, the less interest you have to

(03:56):
pay, and lenders, banks, lendinginstitutions will give you more
money in order to pay forwhatever it is that you want to
pay for.
Say, if you're taking out a carloan, you'll get more access to
funds and you'll have a lowerinterest rate.
So the same thing happens withthe state and the county in

(04:21):
terms of their level of payingback.
So this rating is just like acredit score, and so you get to
pay back those bonds at a lowerinterest rate.

(04:50):
County had been downgraded byMoody.
However, we didn't hear thatsame hoopla once Standard Poor
and Fitch came out.
About a couple of weeks laterin May I believe it was May 22nd
that they came out and saidthat they're going to keep the
bond rating at a triple A, tokeep the bond rating at a triple

(05:11):
A.
So the state of Maryland did,on June 11th, go out and sell
about close to a billion 1.6billion to be exact of general
bond obligations and they wereable to maintain a 3.55%
interest, which really meansthat the Moody downgrade did not

(05:32):
really impact the interest ratethat the state received.
So it remains to be seenwhether or not the county has
gone out.
I did do some research to tryto see if the county has sold

(05:59):
any municipal bonds yet, but Ihave not been able to find
anything that they've sold.
For the general election whichhappens in November, we see a
number of bond bills on ourballot, which is why I always do
a forum with my sorority andother organizations on

(06:20):
understanding the bond questionsor the ballot questions to make
sure you understand what you'revoting on.
I don't always because theysound good, they sound nice,
they are written well andappealing to people.
I don't always vote for ourbond bills because I understand.

(06:40):
The fact is that once we sellthose bonds, it's going to be
our children, our grandchildren,our children's children,
children that have to repaythose bonds.
Usually they are at the countylevel.
I'm not quite 100 percent surewhat the length of time is at
the state, but they can beanywhere from 15 to 30 years

(07:02):
that we're paying these bondsback with interest.
So that means that we'repassing down the debt to the
next generation, and so I don'talways vote positively for them,
because I understand what itultimately means, and so we

(07:22):
should continue to be goodstewards over the tax dollars
that we receive from ourresidents, whether it's state
income tax, whether it's countyincome tax, whether it's
property tax, whatever type oftax and fees that are being
collected from the residents ofthe state of Maryland and Prince

(07:44):
George's County, we have to begood stewards over them.
So I am not a big proponent ofalways going to Wall Street and
saying, hey, give us some moneyfor our capital improvement
projects.
Lord knows that we do needcapital improvements, not only
in the state but in PrinceGeorge's County, and
specifically in southern PrinceGeorge's County where I live.

(08:08):
We definitely need our roadsimproved.
We need new schools althoughthe schools are no longer, for
the county, a part of our CIPproject or bond initiative
project, I should say because wenow, as one of the only states
or one of the only schooldistricts that have the

(08:32):
public-private partnership tobuild our schools, including a
big K-8, k-8 campus in FortWashington, we're now about to
embark on a phase two of thatsame project, which will have

(08:57):
eight new schools, which willinclude another K-8 campus in
Brandywine, on the campus ofBrandywine Middle School, which
is slated to be finishedconstruction by 2028.
They've already done the plan,they've already got the bid done
and so now we're in the wholepreparing for the construction

(09:21):
process.
But anyway, I digress.
I'm going to talk about theschool system in another podcast
that will kind of deal withconstruction issues as well as
dealing with the deficit interms of the blueprint for
education, which requires thestate I mean, excuse me, the

(09:44):
counties because the state hasnow passed on the responsibility
for pensions they have tomaintain their effort and level
of funding year after year, plusnow they also have to be able

(10:16):
to pay the pension costs of theteachers that are retiring.
So it's a lot to consider.
But I wanted to come on and kindof talk about that bond rating
issue because again it was a lotof hoopla and a big splash with
the negative rating, but no onetalked about the fact that

(10:38):
Standard Poor, as well as Fitch,kept the AAA bond rating.
So two out of three is prettygood.
We still do need to keep ourfiscal house in order.
So for Prince George's County,some of the things that I think
we need to do is just as we dowith our household bills.

(11:03):
One, we pay down our debt.
So if there is a possibilitythat we could pay down more on
some of the outstanding bondissues that we've gotten that
voters have approved, that willgo a long way in terms of the
rating agencies looking at ourability to pay our debt.

(11:25):
Two, we don't borrow any moremoney for capital improvement
projects unless absolutelynecessary.
Now that's easier said thandone because we all know,
particularly in Prince George'sCounty, that we've got a lot of
infrastructure capitalimprovement projects that we
need to take care of.

(11:46):
Roads and highways are just thefirst thing.
We are building likegangbusters throughout the
county in terms of residentialdevelopment and we're seeing
more and more cars on the road.
We're seeing more congestion,more crowding and just a lot of

(12:07):
traffic congestion in our area,and particularly in the southern
portion of Prince George'sCounty, that we don't want to

(12:31):
have to go to Wall Street tobuild capital improvement
projects specifically for roadsand transportation.
I think that that Costs shouldbe attributed to the developers
who are building the townhouses,the townhouses, the townhouses,
the townhouses and I amrepeating that intentionally,

(12:54):
because we're seeing a lot ofmultifamily dwelling units being
built as opposed tosingle-family homes being built
in our area, in our county, andbecause of that, you're going to
see more congestion on ourroads.
So I think that cost reallyshould be eaten up and deferred

(13:18):
to the developers to do.
We shouldn't have to go to WallStreet to borrow money to fix
our roads, when it's thedevelopers that are increasing
the traffic counts and thecongestion on our roads.
So we should definitely requirethem to do that, and I know
here in the southern part of thecounty there is an effort to

(13:41):
improve some intersections, someroadways, but I think we need
to do much, much more.
Second, besides paying down ourdebt I mean third, I should say,
besides paying down our debtand borrowing less money for
capital improvement projects, wedo have to find other revenue

(14:05):
sources in terms of commercialand business enterprise.
That has always been theAchilles heel in Prince George's
County and somewhat in thestate of Maryland.
There are certain pockets inthe state of Maryland.
Obviously, montgomery Countydoes a really good job in
attracting business.
Prince George's County needs todo a better job and I think one

(14:28):
of the areas where we need tofocus on is health care.
We are expanding the MidStarSouthern Maryland Hospital
Center in Clinton, we got thenew hospital in Largo and we're
also going to soon see a newcampus for the Adventist Health

(14:52):
Care System in Fort Washington.
We're almost at, and probablyare now at, a million people and
we simply do not have enoughhospital beds for the aging
population that we have here inthe county and specialties in
Prince George's County, whetherit's related to any particular

(15:13):
type of health care, for example, cancer, it could be some that
deal with various diseasesdiabetes, for example.

(15:36):
We know that we have a lot ofAfrican-American that have a
family history of diabetes andwe need to be able to treat
those patients accordingly.
We try to expand in the healthcare field.

(16:20):
Episode that I had somecaretaking responsibilities, so
I'm a little bit more sensitiveto that now that I've had to
handle caretaking for my mom forthe last two years Both in 2024
and the beginning of 2025.
And I have a greaterappreciation for our health care

(16:44):
professionals, our nurses, allthose who are called to help us
in our time of health needs andcrisis.
And so I really think PrinceGeorge's County would do a
service to its residents byexpanding health care as the
area of commercial and revenuestream that we're trying to

(17:08):
attract.
There's some other commercialand revenue streams that we
could try to attract.
Obviously, as atelecommunications attorney, I
think, looking at thetelecommunications needs that we
have, I was just at my ownphysical therapist and she was

(17:29):
complaining about the fact thatwe that she was experiencing a
lot of outages with her providerfor internet service and she
actually had to go out and buyhotspots.
So I provided her with someresources that she could use to

(17:50):
try to get a better service.
But I think the demand is sogreat because of all the
residents that we have.
A lot of people still work fromhome maybe not as much, but
they still probably work fromhome one to two days a week and
still go in at least three daysa week.
You still have a lot ofstudents who are using the

(18:16):
Chromebooks, the MacBooks andwhat have you in Prince George's
County public schools, so theyhave to have access to the
internet as well.
I think the demand is reallyreally great and we should do
more to capitalize on thatdemand.
Again, obviously I'm a littlebiased because I'm a
telecommunications attorney andhave my own broadband company,

(18:40):
but I think that's an area wherewe can capitalize on in terms
of bringing in revenue streamsand sources.
But it's not just so much tocapitalize on it and bring in
revenue stream, but there reallyis a need, and today was the
first day hearing my physicaltherapist talk about this issue.

(19:03):
Today was the first day thatI've heard this issue in quite
some time, particularly in anarea Fort Washington, it happens
to be that should be fullybuilt out.
And I'm not saying that it'snot.
It's just that the capacity,we're at capacity and I'm even
experiencing here, as I continueto work from home, experiencing

(19:29):
some outages as well.
I had some problems with mycarrier and I will state who
that is, and that's Verizon Fios.
I've had some issues with them,not as much as my therapist had
mentioned.
However, again, whenever thereis a capacity need, obviously

(19:50):
there is a need for growth anddevelopment, and surely Prince
George's County can capitalizeon that and bring in more
commercial and more businessesthat deal with the
telecommunications, broadbandInternet access, those kinds of
technologies.

(20:10):
So those are just a few of mysuggestions for the county.
Now for the state of Maryland.
The state did a big yeoman'sjob in the 2025 legislative
session in trying to balance thebudget.
Like many other states, theyhave to balance their budget,

(20:35):
and so they were able to do so,and they did so by, like I said
earlier, moving some of thecosts from the state to the
local level.
So they shifted the teacherpensions, they also shifted the

(20:56):
cost for property taxassessments to local governments
and they still will have so in2026 and 2027,.
It seems that we will have abalanced budget because of these
costs and you may have heardover the news that the governor
was doing buyouts, even forstate employees, and it was for

(21:21):
just certain employees.
It wasn't every employee had to.
You had to meet certaincriteria and those are some of
the things they did hiring free,so any positions that were open
they decided not to go and hirenew employees.
So they're doing some things totry to cut back on their

(21:45):
expenses and the costs.
I do think that there were someinitiatives, one of which was a
really good signature initiativeof Governor Westmore and it had
to do with requiring studentsto fulfill community service
obligations, and I thought thatwas a little duplicative of what

(22:05):
some of the local schooldistricts were doing, at least
in Prince George's County thereis a community service
obligation that you have tocomplete as part of receiving
your diploma for high school.
So I wasn't really sure how thegovernor's plan would play out.
And he has a cabinet levelperson, mr Paul Montanaro, who

(22:29):
was on the Prince George'sCounty School Board for a small
period of time.
Then he ran for countyexecutive against now Senator
Angela Osso Brooks for hersecond term.
Obviously he lost that electionbut I have not seen any
initiative that has really comedown from the governor's office

(22:52):
and from Paul Montanaro's officeas the secretary of this
community service innovationinitiative to the local level.
And so I think some of thosebig grandiose ideas of positions

(23:12):
and offices that you know itsounded good, you know could be
a good initiative, but it seemeda little one, it seemed a
little duplicative of what someof what some of the counties
were already doing.
At least I know in PrinceGeorge's County they were doing
that, making that a requirement.
I think the governor's office,the plan was to help students

(23:38):
beyond the high school year,students beyond the high school
year, so in that littletransition period, whether they
decide whether to go to college,go to work, go to military, you
know, go somewhere.
There was some littletransition period.
But I have again, I have notseen that trickle down to the
local level where it's reallybeen an impact and impactful for

(24:02):
young adults to take advantageof.
And so that may be an areawhere we need to cut, just cut
that entire department andagency within the state, because
I just don't see it impactingat the local level.
See it impacting at the locallevel.

(24:26):
And there are probably someother grand initiatives that he
had, the governor had, when heran that may be a little bit
more costly than what weanticipated, and so I'm going to
address the big issue that hascome up and everybody says well,
he came into office GovernorMoore came into office with a
big surplus, at least that'swhat the last governor said.

(24:46):
Governor Hogan said we have torecognize that all states, just
about all 50 states I won't, Ishouldn't say every, but every
state did receive a significantwindfall in financial
contribution and help from thefederal government as a result
of COVID, and so because of that, there were a lot of states

(25:12):
that had money in surplusbecause of the COVID payments.
But that was just a one time.
You know, maybe two times, twoyears in a row, that we got
those funds.
And so when Governor Hogan wasleaving office, that slush fund
was still there.
Right, it's no longer there.

(25:33):
It was no longer going to bethere even before the current
federal administration underthis president started.
It was just this one time totime payment over two years to
deal with the pandemic and toeradicate the needs as a result

(25:55):
of the pandemic, not justeradicate the pandemic itself,
health wise, but also all of thefallout that came from that and
the fallout that came from that.
As a result, as you know,businesses closed because you
know we were on lockdown,schools were closed, a lot of

(26:17):
other way that we were doingordinary life basically shut
down and closed, and so thefederal government helped to
bail out, not just cities,states and towns, but really
local businesses that hadsuffered as a result of the

(26:41):
lockdown.
So you had PPP loans, you hadall other kinds of grants that
came out as a result of thepandemic and the government
being shut down at local schools.

(27:01):
You know local governments,everybody shut down, right.
So for two years we kind ofendured that and that's how we
started.
Got out of that financially wasby those government payments
and payouts to all of not onlyindividuals, businesses, but

(27:23):
state and local governments aswell.
Now that that money is all gone,you know there's no quote
unquote slush fund surplus left,and so Governor Moore had to
make some tough decisions aboutwhat he actually ran on and how
he could actually afford it, andso that's why I said, for

(27:46):
example, the initiative thatdeals with community service and
the initiative to providefunding for students who may be
in some transition period afterthey graduate from high school
may have to be something thatyou know we have to put on the

(28:07):
chopping block because, one, wecan't afford it, but two, as I
said earlier, I just haven'tseen the result on the local
level that has really benefitedand I've been looking for
opportunities as a member of aboard of four I mean, excuse me

(28:30):
a nonprofit organization calledGateway Second Chance Foundation
.
A nonprofit organization calledGateway Second Chance
Foundation that does exactlywhat the Governor Moore had
planned.
It gives students who need asecond chance, both at education
and life, gives them thatopportunity to help them have

(28:54):
the skills necessary to beproductive citizens.
And we can't seem to get agrant from not only our local
but also the state level.
So that may be an area where wehave to reevaluate and there's
probably a lot of areas that wehave to reevaluate whether or

(29:15):
not we're using our tax dollarswisely.
And again, it's kind of simpleNot simple, but it's kind of
akin to what we do at ourhousehold budget lose an earner
in our household.
So if my husband works, I work,if one of us stop working, then

(29:43):
that means we've got to cutback on some things, and so
that's probably the best thingfor us to do, both at the state
and the county level.
And whoever wins office in 2026because we do have a
gubernatorial election in 2026,which means all of the statewide
offices will be up for electionand re-election All the state

(30:08):
delegates and senators they willall be up for election again,
re-election.
And then at the county level,you'll also have those persons
who are at the county executivestate's attorney, county council
, all of the county offices,clerk of the court, register of

(30:31):
wills all of those offices willbe up for reelection again.
And we really need people thatunderstand economic development
but, more importantly, not justeconomic development without
investor dollars.
And so where are those investordollars going to come from?

(31:06):
So we need to thinkstrategically about that so that
we can maintain our AAA bondrating not just with two but all
three rating credit ratingagencies.
And so I see healthcare andtelecommunications as two

(31:27):
potential sources that we couldgo after here in Prince George's
County and at the statecontinued to build out the
economic I mean, excuse me, noteconomic but the innovation and
technology that we see along theICC corridor Although the ICC

(31:48):
corridor.
I did some research on that.
I thought it was going to bemore innovative.
On that, I thought it was goingto be more innovative.
They have quite a diversity ofbusinesses that are in along
that corridor.
It's just, it's not innovationand technology, it's hospitality
, it's defense, it'spharmaceutical it's quite a bit.

(32:13):
So it's a's pharmaceutical,it's it's quite, it's quite a
bit, so it's a.
It's a very diverse corridorand that's good and booming for
Montgomery County.
But we need something here inPrince George's County as well,
and so I'm putting my hat in forhealth care only because really

(32:39):
it's a need.
We have way too many peoplethat leave this county.
They always talk about we leavethe county for jobs and we go
work in DC or in Virginia, butwe actually have a lot of people
that have doctor's offices inDC and in Montgomery County and

(33:01):
they go to the hospitals there,the doctor's offices in other
jurisdictions as well HowardCounty or Anne Arundel County.
We could build up our healthcare system and create more
hospitals, create more specialtyoffices where we can see our

(33:23):
own physicians here in thecounty.
I think that will be a greatboon for the county and, as I
said, shameless plug ontelecommunications and, as I
said, shameless plug ontelecommunications.
I just you know that's alwaysbeen my bread and butter in

(33:45):
terms of practice, and so Ifollow it closely and I see what
other jurisdictions are doing.
I even think that now theInternet has become another
utility, just like electricity,water, gas.
You can't even apply for a jobat McDonald's anymore without

(34:07):
having access to the internet.
All of the job applications areonline, everything's online.
Nothing is paper anymore.
You have to submit all yourpaperwork electronically.
And so some jurisdictions inother states they're not waiting
for the big carriers to comethere, especially in the rural

(34:28):
areas.
Some of those jurisdictions areowning and operating their own
internet and broadband services,and so I think that's great.
I think Prince George's Countywould be better off if we would
even consider it.

(34:48):
You know it's not somethingthat you can take on lightly,
but it's certainly somethingthat we should consider.
Especially says that they alsohave issues.
Then I think it's a capacityissue, and I think the county

(35:21):
would be served in providing thecapacity that is needed, and
it's not being served by currentcarriers.
So that's just my two cents.

(35:58):
So that's just my two cents andthat's all that I'm going to
cover on this episode dealingwith the AAA bond rating from
Standard Poor's and Fitchmaintaining that AAA bond rating
for both the state and PrinceGeorge's County.
So I wanted to report on thatand get your feedback.
If any of this sounds ofinterest to you or if you have
any more questions, feel free toreach out to me.

(36:18):
I'm going to put that in thenotes and the credits and all
the other information so you cankind of read for yourself some
of the articles that discussthis issue and if you think we
need to have a furtherdiscussion, especially in light
of the 2026 elections that arecoming up.

(36:39):
So thank you so much for yourtime.
We will see you on the nextepisode of this podcast.
All Politics is Local with me,your host, tamara Davis-Brown.
Thanks for listening.