ESSEX COUNTY, NJ — Essex County Executive Joseph N. DiVincenzo Jr. announced July 19 that Fitch Ratings upgraded Essex County’s bond rating to “AA-plus with a positive financial outlook,” up from an “AA-plus rating with a stable financial outlook.” This is the first ratings upgrade Essex County has received from Fitch Ratings since 2017. Earlier this month, DiVincenzo announced that Moody’s Investors Services reaffirmed Essex County’s Aaa bond rating, which it has maintained since 2018.
Fitch Ratings Inc. is an American credit-rating agency and is considered to be one of the “Big Three” credit-rating agencies, along with Moody’s and Standard & Poor’s.
“Within the past two weeks, we have received positive news about our financial strength from both Fitch Ratings and Moody’s Investors Services. Earning, and then maintaining, the highest bond ratings always has been my goal because it demonstrates to Wall Street that investing in Essex County is a good decision. It also enhances property values for our residents and makes us more attractive for businesses,” DiVincenzo said. “Over the past 20 years, we have taken Essex County from just above junk bond status to being one of the highest rated government agencies in the state. This demonstrates our commitment to ensuring fiscal stability.”
The county executive thanked his department and division directors, the Essex County Board of County Commissioners, the county’s constitutional officers, county agencies and the 3,500 county employees for sharing his commitment to help strengthen the county’s financial position. This rating helps Essex receive better interest rates and attracts more prospective investors when the county issues bonds.
The 10-page Fitch Ratings report states that the AA-plus bond rating with a positive financial outlook is the result of the county’s “solid revenue and expense control and strong reserve position.” It reads: “Careful expenditure management combined with moderate tax rate increases and conservative revenue assumptions have led to growth in reserves the past 10 years. Fitch expects management to maintain a high level of financial resilience through periods of economic downturns given its substantial gap-closing ability and superior inherent budget flexibility. Solid expenditure and revenue controls and a history of prudent budget decisions support this expectation.
“The rapid pace of debt amortization contributes somewhat to high annual debt service, although debt service costs drop significantly beginning in 2024. The county has adequate controls over employee headcount and wages,” the report read, adding that Essex County’s 2022 operating budget of $865 million included a zero-percent property tax increase, conservative estimates for certain miscellaneous revenues and $36 million in revenue coming from the fund balance.
The Fitch Ratings report was issued for a series of bonds totaling $57.7 million. The proceeds from bonds reviewed provide revenue to finance county college improvements, various capital improvements and vehicle acquisitions.
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