By John Savich, Director, St. Mary’s County Dept. of Economic and Community Development
LEONARDTOWN, Md. - Trite though it may be, the beginning of the year is a darn fine time to take stock. In a normal year, I would do so by sifting through a variety of economic reports to distil the pertinent facts about the St. Mary’s County economy for this column. This year my task is a little easier, thanks to the credit analysts at the venerable Wall Street firm Standard & Poor’s, who just reviewed our county and upgraded its credit rating. Bear with me, and I think I can do this without resorting to a single number or percentage.
S&P is one of three firms that provides credit ratings to governments and businesses worldwide, among them St. Mary’s County. Our County government is a small bit of S&P’s $34 trillion business, but the rating is important to all of us. When the County goes to the bond market to borrow money for things like road improvements and school construction, the credit rating determines the interest rate the County must pay. A better rating means a lower rate and the cost of borrowing is less. This can amount to hundreds of thousands of dollars.
So the uptick in the County rating, to AA, is good news. But, why did they make that decision? It comes down to two factors. First, the economic outlook and, second, how well the County is managing its money.
St. Mary’s County came through the BRAC process very well—remember Pax River scored better in military value than any other facility. S&P also commended the County’s strong financial position and established fiscal policies. Their analysis then follows a path that will be familiar to many of us in the County. Strong defense sector. Increasing population. Most residents work in the County, rather than commuting to jobs elsewhere. A growing labor force. High incomes. Low unemployment. A growing tax base.
On the financial management side, the rating agencies give high marks for the values most of us learned early in life. Set aside something for a rainy day. Invest in the future—for local government, that means keeping up with local infrastructure needs. Don’t borrow too much. All the basics, but often easier said than done. Through a number of election cycles, the County has consistently maintained and improved, leading to the increased rating. Kudos to current and former members of the board of county commissioners and our entire finance staff.
We have a good balance of economic success and quality of life in St. Mary’s County, but it does not come by accident. In the coming year we will sort out more details of that balance as we work to preserve agricultural land, provide more workforce housing and extend economic success to all citizens. The good news from Wall Street is that our financial house is in order, that an investment in St. Mary’s County’s future is a solid investment. That’s a good foundation for the hard work to come.