The Honorable David R. Craig, County Executive of Harford County, has issued the following statement regarding the Debt Ceiling issue:
The news is filled with stories about the federal debt ceiling and the federal budget deficit in Washington, DC. For Harford County this is not just news stories but may result in actions that directly affect our citizens.
Moody’s Investors Service, one of the recognized credit rating agencies, put the U.S. Aaa credit rating on review for possible downgrade. This action is trickling down to other Aaa rated government organization which locally includes the State of Maryland and the Aaa rated counties – Harford, Baltimore, Howard County, Montgomery and Prince George’s.
Moody’s Investors Service placed Harford County on the watch list for potential downgrade and will be reviewing the county’s dependence on federal revenues, its sensitivity to macroeconomic cycles and its available financial resources to offset these factors. They will also review the positive factors such as strong financial position, operating flexibility and management responsiveness.
We have strong positive factors that we believe will count favorably in the analysis by Moody’s analysts. We have taken sound financial management steps of living within our budget, having a balanced budget and have a reserve fund. We try to provide the best services to our citizens in a cost-effective manner. However, the inability of Washington to take care of the nation’s finances is affecting us at the local level.
If the County is downgraded to Aa, borrowing costs will increase. On a bond issue of approximately $100 million it could cost the County an additional $3.2 million in interest over the 20 year period of the issue. This is a significant difference and means money that is not available to provide services the citizens.
Although a “deal” was brokered between the leadership of both parties which subsequently passed both the House and Senate, and was signed into law by President Obama, there will be no “deal” for state, county and local governments and the American people who are “Main Street America”.
In any democratic republic, leaders are elected to help balance the divergent wants and needs of an often diverse and divided constituency. However what we have failed to do at the federal level is learn to balance those wants and needs with the taxes we are willing to pay and the costs associated with providing certain services. The cuts enacted by Congress will undoubtedly affect millions of Americans from school children, those with disabilities, health care and our elderly.
As County Executive I am required by our Charter to prepare a balanced budget and the County Council is similarly charged with passing an annual budget which is balanced. Not only is this sound financial management, its good government. Congress needs to follow the lead of state and local governments and do the same. If Congress were to act responsibly to do what’s right and pass a Balanced Budget Amendment, as opposed to kicking the budget issue further down the road with each passing year, the American people and future generations would be far better off than they are today.