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

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.

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Returning with Good News

Tamara Davis Brown 0:05

Welcome to another episode of All Politics is Local with me , your host , tamara Davis-Brown . I am back . It's been a minute since I've recorded an episode . I had some caretaking responsibilities as well as seeing about my own health . However , I've had lots of ideas to come across my desk to discuss with you , and I'm finally getting around to recording some new episodes . So first I want to share some good news and say thank you , thank you , thank you . I got noticed that All Politics is Local is in the top 80 . I made number 79 of civic engagement podcasts nationwide . So nationwide we are in the top 80 , number 79 .

Tamara Davis Brown 1:03

And that's thanks to you for listening and tuning in and asking great questions and wanting to know about various things that sometimes I can't just send an email about . I just need to talk about it a little bit . So today we're going to go back a little bit in time because in May of this year we found out that both the state of Maryland and Prince George's County were downgraded in their bond rating by one of three bond rating agencies , which was Moody , and so we're going to discuss that and what happened , as well as discuss some possible things that the county can do and maybe perhaps the state can do in order to get its financial homes in order

Understanding Bond Ratings

Tamara Davis Brown 2:05

. So you may have heard the news that both Maryland , the state of Maryland and Prince George's County lost their AAA bond rating by the bond rating agency Moody . However , there are three rating agencies , not just Moody , but also Standard Poor you may have heard that term or hear S&P , as well as Fitch . Both Standard Poor and Fitch maintained the AAA bond rating for both the state of Maryland and Prince George's County , so it was a mixed bag . He had the majority to maintain the AAA bond rating for the state and the county , but Moody downgraded its rating for both the state and the county .

Tamara Davis Brown 3:01

So what does this really mean ? As some of you may or may not know , what happens when we go to Wall Street to sell state and county or municipal bonds . We sell them so that we can build capital improvement projects such as your roadways , state highways , new schools , new police and fire station all of the infrastructure projects that we need in order to support us as residents of our state and our county . So we sell those bonds and we pay those bonds back with interest and just like a regular credit score . The higher your credit score is , the less interest you have to pay , and lenders , banks , lending institutions will give you more money in order to pay for whatever it is that you want to pay for . Say , if you're taking out a car loan , you'll get more access to funds and you'll have a lower interest rate . So the same thing happens with the state and the county in terms of their level of paying back . So this rating is just like a credit score , and so you get to pay back those bonds at a lower interest rate .

Tamara Davis Brown 4:50

County had been downgraded by Moody . However , we didn't hear that same hoopla once Standard Poor and Fitch came out . About a couple of weeks later in May I believe it was May 22nd that they came out and said that they're going to keep the bond rating at a triple A , to keep the bond rating

Impact on State and County

Tamara Davis Brown 5:11

at a triple A . So the state of Maryland did , on June 11th , go out and sell about close to a billion 1.6 billion to be exact of general bond obligations and they were able to maintain a 3.55% interest , which really means that the Moody downgrade did not really impact the interest rate that the state received . So it remains to be seen whether or not the county has gone out . I did do some research to try to see if the county has sold any municipal bonds yet , but I have not been able to find anything that they've sold .

Tamara Davis Brown 6:03

For the general election which happens in November , we see a number of bond bills on our ballot , which is why I always do a forum with my sorority and other organizations on understanding the bond questions or the ballot questions to make sure you understand what you're voting on . I don't always because they sound good , they sound nice , they are written well and appealing to people . I don't always vote for our bond bills because I understand . The fact is that once we sell those bonds , it's going to be our children , our grandchildren , our children's children , children that have to repay those bonds . Usually they are at the county level . I'm not quite 100 percent sure what the length of time is at the state , but they can be anywhere from 15 to 30 years that we're paying these bonds back with interest . So that means that we're passing down the debt to the next generation , and so I don't always vote positively for them , because I understand what it ultimately means , and so we should continue to be good stewards over the tax dollars that we receive from our residents , whether it's state income tax , whether it's county income tax , whether it's property tax , whatever type of tax and fees that are being collected from the residents of the state of Maryland and Prince George's County , we have to be good stewards over them .

Tamara Davis Brown 7:48

So I am not a big proponent of always going to Wall Street and saying , hey , give us some money for our capital improvement projects . Lord knows that we do need capital improvements , not only in the state but in Prince George's County , and specifically in southern Prince George's County where I live . We definitely need our roads improved . We need new schools although the schools are no longer , for the county , a part of our CIP project or bond initiative project , I should say because we now , as one of the only states or one of the only school districts that have the public-private partnership to build our schools , including a big K-8 , k-8 campus in Fort Washington , we're now about to embark on a phase two of that same project , which will have eight new schools , which will include another K-8 campus in Brandywine , on the campus of Brandywine Middle School , which is slated to be finished construction by 2028 . They've already done the plan , they've already got the bid done and so now we're in the whole preparing for the construction process . But anyway , I digress . I'm going to talk about the school system in another podcast that will kind of deal with construction issues as well as dealing with the deficit in terms of the blueprint for education , which requires the state I mean , excuse me , the counties because the state has now passed on the responsibility for pensions they have to maintain their effort and level of funding year after year , plus now they also have to be able to pay the pension costs of the teachers that are retiring . So it's a lot to consider .

Tamara Davis Brown 10:24

But I wanted to come on and kind of talk about that bond rating issue because

Solutions for Financial Stability

Tamara Davis Brown 10:30

again it was a lot of hoopla and a big splash with the negative rating , but no one talked about the fact that Standard Poor , as well as Fitch , kept the AAA bond rating . So two out of three is pretty good . We still do need to keep our fiscal house in order . So for Prince George's County , some of the things that I think we need to do is just as we do with our household bills . One , we pay down our debt . So if there is a possibility that we could pay down more on some of the outstanding bond issues that we've gotten that voters have approved , that will go a long way in terms of the rating agencies looking at our ability to pay our debt . Two , we don't borrow any more money for capital improvement projects unless absolutely necessary . Now that's easier said than done because we all know , particularly in Prince George's County , that we've got a lot of infrastructure capital improvement projects that we need to take care of .

Tamara Davis Brown 11:46

Roads and highways are just the first thing . We are building like gangbusters throughout the county in terms of residential development and we're seeing more and more cars on the road . We're seeing more congestion , more crowding and just a lot of traffic congestion in our area , and particularly in the southern portion of Prince George's County , that we don't want to have to go to Wall Street to build capital improvement projects specifically for roads and transportation . I think that that Costs should be attributed to the developers who are building the townhouses , the townhouses , the townhouses , the townhouses and I am repeating that intentionally , because we're seeing a lot of multifamily dwelling units being built as opposed to single-family homes being built in our area , in our county , and because of that , you're going to see more congestion on our roads . So I think that cost really should be eaten up and deferred to the developers to do . We shouldn't have to go to Wall Street to borrow money to fix our roads , when it's the developers that are increasing the traffic counts and the congestion on our roads . So we should definitely require them to do that , and I know here in the southern part of the county there is an effort to improve some intersections , some roadways , but I think we need to do much , much more .

Tamara Davis Brown 13:51

Second , besides paying down our debt I mean third , I should say , besides paying down our debt and borrowing less money for capital improvement projects , we do have to find other revenue sources in terms of commercial and business enterprise . That has always been the Achilles heel in Prince George's County and somewhat in the state of Maryland . There are certain pockets in the state of Maryland . Obviously , montgomery County does a really good job in attracting business . Prince George's County needs to do a better job and I think one of the areas where we need to focus on is health care . We are expanding the MidStar Southern Maryland Hospital Center in Clinton , we got the new hospital in Largo and we're also going to soon see a new campus for the Adventist Health Care System in Fort Washington .

Tamara Davis Brown 14:56

We're almost at , and probably are now at , a million people and we simply do not have enough hospital beds for the aging population that we have here in the county and specialties in Prince George's County , whether it's related to any particular type of health care , for example , cancer , it could be some that deal with various diseases diabetes , for example . We know that we have a lot of African-American that have a family history of diabetes and we need to be able to treat those patients accordingly . We try to expand in the health care field . Episode that I had some caretaking responsibilities , so I'm a little bit more sensitive to that now that I've had to handle caretaking for my mom for the last two years Both in 2024 and the beginning of 2025 . And I have a greater appreciation for our health care professionals , our nurses , all those who are called to help us in our time of health needs and crisis . And so I really think Prince George's County would do a service to its residents by expanding health care as the area of

Healthcare as Economic Development

Tamara Davis Brown 17:05

commercial and revenue stream that we're trying to attract . There's some other commercial and revenue streams that we could try to attract .

Tamara Davis Brown 17:16

Obviously , as a telecommunications attorney , I think , looking at the telecommunications needs that we have , I was just at my own physical therapist and she was complaining about the fact that we that she was experiencing a lot of outages with her provider for internet service and she actually had to go out and buy hotspots . So I provided her with some resources that she could use to try to get a better service . But I think the demand is so great because of all the residents that we have . A lot of people still work from home maybe not as much , but they still probably work from home one to two days a week and still go in at least three days a week . You still have a lot of students who are using the Chromebooks , the MacBooks and what have you in Prince George's County public schools , so they have to have access to the internet as well . I think the demand is really really great and we should do more to capitalize on that demand . Again , obviously I'm a little biased because I'm a telecommunications attorney and have my own broadband company , but I think that's an area where we can capitalize on in terms of bringing in revenue streams and sources .

Tamara Davis Brown 18:49

But it's not just so much to capitalize on it and bring in revenue stream , but there really is a need , and today was the first day hearing my physical therapist talk about this issue . Today was the first day that I've heard this issue in quite some time , particularly in an area Fort Washington , it happens to be that should be fully built out . And I'm not saying that it's not . It's just that the capacity , we're at capacity and I'm even experiencing here , as I continue to work from home , experiencing some outages as well . I had some problems with my carrier 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 there is a capacity need , obviously there is a need for growth and development , and surely Prince George's County can capitalize on that and bring in more commercial and more businesses that deal with the telecommunications , broadband Internet access , those kinds of technologies . So those are just a few of my suggestions for the county .

Tamara Davis Brown 20:18

Now for the state of Maryland . The state did a big yeoman's job in the 2025 legislative session in trying to balance the budget . Like many other states , they have to balance their budget , and so they were able to do so , and they did so by , like I said earlier , moving some of the costs from the state to the local level . So they shifted the teacher pensions , they also shifted the cost for property tax assessments to local governments and they still will have so in 2026 and 2027, . It seems that we will have a balanced budget because of these costs and you may have heard over the news that the governor was doing buyouts , even for state employees , and it was for just certain employees . It wasn't every employee had to . You had to meet certain criteria and those are some of the things they did hiring free , so any positions that were open they decided not to go and hire new employees . So they're doing some things to try to cut back on their expenses and the costs .

Tamara Davis Brown 21:47

I do think that there were some initiatives , one of which was a really good signature initiative of Governor Westmore and it had to do with requiring students to fulfill community service obligations , and I thought that was a little duplicative of what some of the local school districts were doing , at least in Prince George's County there is a community service obligation that you have to complete as part of receiving your diploma for high school . So I wasn't really sure how the governor's plan would play out . And he has a cabinet level person , mr Paul Montanaro , who was on the Prince George's County School Board for a small period of time . Then he ran for county executive against now Senator Angela Osso Brooks for her second term . Obviously he lost that election but I have not seen any initiative that has really come down from the governor's office and from Paul Montanaro's office as the secretary of this community service innovation initiative to the local level . And so I think some of those big grandiose ideas of

Telecommunications and Future Growth

Tamara Davis Brown 23:12

positions and offices that you know it sounded good , you know could be a good initiative , but it seemed a little one , it seemed a little duplicative of what some of what some of the counties were already doing . At least I know in Prince George's County they were doing that , making that a requirement .

Tamara Davis Brown 23:32

I think the governor's office , the plan was to help students beyond the high school year , students beyond the high school year , so in that little transition period , whether they decide whether to go to college , go to work , go to military , you know , go somewhere . There was some little transition period . But I have again , I have not seen that trickle down to the local level where it's really been an impact and impactful for young adults to take advantage of . And so that may be an area where we need to cut , just cut that entire department and agency within the state , because I just don't see it impacting at the local level . See it impacting at the local level . And there are probably some other grand initiatives that he had , the governor had , when he ran that may be a little bit more costly than what we anticipated , and so I'm going to address the big issue that has come up and everybody says well , he came into office Governor Moore came into office with a big surplus , at least that's what the last governor said .

Tamara Davis Brown 24:46

Governor Hogan said we have to recognize that all states , just about all 50 states I won't , I shouldn't say every , but every state did receive a significant windfall in financial contribution and help from the federal government as a result of COVID , and so because of that , there were a lot of states that had money in surplus because of the COVID payments . But that was just a one time . You know , maybe two times , two years in a row , that we got those funds . And so when Governor Hogan was leaving office , that slush fund was still there . Right , it's no longer there . It was no longer going to be there even before the current federal administration under this president started .

Tamara Davis Brown 25:45

It was just this one time to time payment over two years to deal with the pandemic and to eradicate the needs as a result of the pandemic , not just eradicate the pandemic itself , health wise , but also all of the fallout 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 other way that we were doing ordinary life basically shut down and closed , and so the federal government helped to bail out , not just cities , states and towns , but really local businesses that had suffered as a result of the lockdown . So you had PPP loans , you had all other kinds of grants that came out as a result of the pandemic and the government being shut down at local schools . You know local governments , everybody shut down , right . So for two years we kind of endured that and that's how we started . Got out of that financially was by those government payments and payouts to all of not only individuals , businesses , but state and local governments as well .

Tamara Davis Brown 27:25

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 about what he actually ran on and how he could actually afford it , and so that's why I said , for example , the initiative that deals with community service and the initiative to provide funding for students who may be in some transition period after they graduate from high school may have to be something that you know we have to put on the chopping block because , one , we can't afford it , but two , as I said earlier , I just haven't seen the result on the local level that has really benefited and I've been looking for opportunities as a member of a board of four I mean , excuse me a nonprofit organization called Gateway Second Chance Foundation . A nonprofit organization called Gateway Second Chance Foundation that does exactly what the Governor Moore had planned . It gives students who need a second chance , both at education and life , gives them that opportunity to help them have the skills necessary to be productive citizens . And we can't seem to get a grant from not only our local but also the state level . So that may be an area where we have to reevaluate and there's probably a lot of areas that we have to reevaluate whether or not we're using our tax dollars wisely . And again , it's kind of simple Not simple , but it's kind of akin to what we do at our household budget lose an earner in our household . So if my husband works , I work , if one of us stop working , then that means we've got to cut back on some things , and so that's probably the best thing for us to do , both at the state and the county level .

Tamara Davis Brown 29:49

And whoever wins office in 2026 because we do have a gubernatorial election in 2026 , which means all of the statewide offices will be up for election and re-election All the state delegates and senators they will all be up for election again , re-election . And then at the county level , you'll also have those persons who are at the county executive state's attorney , county council , all of the county offices , clerk of the court , register of wills all of those offices will be up for reelection again . And we really need people that understand economic development but , more importantly , not just economic development without investor dollars . And so where are those investor dollars going to come from ? So we need to think strategically about that so that we can maintain our AAA bond rating not just with two but all three rating credit rating agencies . And so I see healthcare and telecommunications as two potential sources that we could go after here in Prince George's County and at the state continued to build out the

Looking Ahead to 2026 Elections

Tamara Davis Brown 31:38

economic I mean , excuse me , not economic but the innovation and technology that we see along the ICC corridor Although the ICC corridor .

Tamara Davis Brown 31:49

I did some research on that . I thought it was going to be more innovative . On that , I thought it was going to be more innovative . They have quite a diversity of businesses that are in along that corridor . It's just , it's not innovation and technology , it's hospitality , it's defense , it's pharmaceutical it's quite a bit . 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 corridor and that's good and booming for Montgomery County .

Tamara Davis Brown 32:23

But we need something here in Prince George's County as well , and so I'm putting my hat in for health care only because really it's a need . We have way too many people that leave this county . They always talk about we leave the county for jobs and we go work in DC or in Virginia , but we actually have a lot of people that have doctor's offices in DC and in Montgomery County and they go to the hospitals there , the doctor's offices in other jurisdictions as well Howard County or Anne Arundel County . We could build up our health care system and create more hospitals , create more specialty offices where we can see our own physicians here in the county . I think that will be a great boon for the county and , as I said , shameless plug on telecommunications and , as I said , shameless plug on telecommunications . I just you know that's always been my bread and butter in terms of practice , and so I follow it closely and I see what other jurisdictions are doing .

Tamara Davis Brown 33:49

I even think that now the Internet has become another utility , just like electricity , water , gas . You can't even apply for a job at McDonald's anymore without having access to the internet . All of the job applications are online , everything's online . Nothing is paper anymore . You have to submit all your paperwork electronically . And so some jurisdictions in other states they're not waiting for the big carriers to come there , especially in the rural areas . Some of those jurisdictions are owning and operating their own internet and broadband services , and so I think that's great .

Tamara Davis Brown 34:40

I think Prince George's County would be better off if we would even consider it . You know it's not something that you can take on lightly , but it's certainly something that we should consider . Especially says that they also have issues . Then I think it's a capacity issue , and I think the county would be served in providing the capacity that is needed , and it's not being served by current carriers . So that's just my two cents .

Tamara Davis Brown 35:58

So that's just my two cents and that's all that I'm going to cover on this episode dealing with the AAA bond rating from Standard Poor's and Fitch maintaining that AAA bond rating for both the state and Prince George's County . So I wanted to report on that and get your feedback . If any of this sounds of interest to you or if you have any more questions , feel free to reach out to me . I'm going to put that in the notes and the credits and all the other information so you can kind of read for yourself some of the articles that discuss this issue and if you think we need to have a further discussion , especially in light of the 2026 elections that are coming up . So thank you so much for your time . We will see you on the next episode of this podcast . All Politics is Local with me , your host , tamara Davis-Brown . Thanks for listening .