On Tuesday, officials from Fairfax county approved $256.3 million in bonds, to be used to fund a new elementary school and other improvements, reports The Washington Post. This situations sets the stage for a critical review of the struggling county’s fiscal health.
New York agencies will grade the bonds before February when they are scheduled to be issued. This is causing county officials to fret over a potential downgrade from the triple-A ratings they have garnered in since the 1970s.
Fairfax County’s still weak economy has lead to a a projected $179 million budget gap spanning over the next two years. The Moody’s rating house attached a “negative outlook” to the county’s general obligation bonds, that are used to pay for schools and roads among other infrastructure improvements.
It has been estimated by officials that Fairfax has been able to save almost $662 million in debt repayments since 1978 because of it’s stellar ratings, which most recently resulted in an interest rate of 2.84 percent.
A potential rate hike could increase the country’s annual debt payments, further causing a challenge of funding schools and other services without having to cut programs or hike taxes. Fairfax officials have scheduled meetings with three different bond-rating agencies next month in efforts to convince them that they’re county’s fiscal health is good.