Partisan Bickering Putting Local Economies Across Country at Risk
The continued inaction and partisan bickering over the very high amount of debt the federal government is carrying and how to deal with it is putting at risk the credit rating Fairfax County has worked so hard to achieve and maintain for the last 36 years. For the first time since 1975, Fairfax County (as well as local and state governments across the country) is facing the possibility of losing our Aaa credit rating from Moody’s Investor Service, a decision that will not interfere with our ability to meet our financial obligations but is nonetheless very troubling.
The decision by Moody’s to declare the Commonwealth of Virginia’s Aaa rating as vulnerable to a downgrade was based on Virginia’s heavy reliance on federal spending. Fairfax County is home to a large population of federal workers and businesses that rely on federal contracts. This linkage, and the impasse at the federal level, puts our rating at risk.
In 1975, Moody’s gave Fairfax County a bond rating of Aaa. We have held that rating ever since, and Moody’s reaffirmed this rating four times this year as recently as July 6. In that July 6 communication, Moody’s praised the County for its fiscal management and economic diversity, and said Fairfax County is “positioned for long-term stability.” But in the face of uncertainty in Washington, Moody’s is taking the overly cautious step of placing stellar bond ratings on notice that they might be downgraded in the event the U.S. credit rating is downgraded.
To put it simply: Fairfax County does not have a debt problem, the federal government does. Even during times when Fairfax County faced serious fiscal challenges, such as during the Doomsday Budgets of the mid-1990s, our Board was able to make the difficult and sometimes unpopular decisions necessary to balance our budgets, something the federal government has not done. I am proud of the financial record of Fairfax County and the decisive actions our Board has taken to keep our top credit rating.
Chairman, Fairfax County Board of Supervisors