Despite the economic slowdown triggered by the coronavirus, Hamilton County has maintained its top financial rating among all of Tennessee's 95 counties.
As the county prepares to issue another $63.6 million of general obligation debt next week to fund a variety of county projects, all three major bond rating agencies have reaffirmed their top ratings for the financial health of Hamilton County's government.
Since 2011, Hamilton County is the only county in Tennessee to receive top bond ratings from all three rating agencies — Standard and Poor's, Fitch and Moody's.
Even though unemployment in the county has more than doubled since the record low 3.3% rate reached last year, Hamilton County tax revenues are remaining stable, or even increasing, from both a 2% gain in property tax collections due to new development in the past year and a 35% jump in sales tax collections driven by improved collections on internet sales. Hamilton County also received $11.1 million from the federal government through the Coronavirus Aid, Relief and Economic Stability (CARES) act.
Although some tax revenues are expected to suffer in the next year because of the slower economy, Hamilton County sought to offset the decline by not filling vacant jobs or giving most county employees a raise this year. Even with the pandemic putting the brakes on the economy, the county is expected to end up with a surplus of $5 million to $8 million in the fiscal year that ended June 30, according to FitchRatings.
"The county plans to continue to leave vacant non-essential positions in fiscal 2021 and did not provide for any raises in the county or the Department of Education for the fiscal year," said Patrick Goggins, an analyst for Fitch Ratings Inc. "The county budgeted about $7.4 million in capital outlay which it can reduce in the event that revenues are below budgeted expectations."
Fitch reaffirmed its top AAA rating for Hamilton County, predicting that "employment growth will resume following the pandemic through business expansions and new companies entering the county."
Moody's Investment Services said Hamilton County is already on the economic rebound.
"The county's largest employers slowed operations and staffing during the economic shutdown but have started to return to normal operations and the local economy is expected to slowly return to normal in the near term," Moody's said in its economic assessment of Hamilton County. "The county's core operations have been supported by property taxes which have been trending fairly similar to previous years."
Hamilton County Mayor Jim Coppinger praised his financial team led by Al Kiser, Lee Brouner and Vonda Patrick, "all of whom contributed to Hamilton County's continuing conservative financial stability" despite the economic recession this spring. Since becoming the county mayor in January 2011, Coppinger said the Chattanooga area has enjoyed more than $4.2 billion of new economic development which has kept property tax collections, which represent about 70% of local tax collections, rising every year.
"Hamilton County's long term conservative fiscal policies have allowed the county to anticipate and weather unexpected events such as the coronavirus," Coppinger said.
In its analysis, S&P analysts said the county's " financial practices are strong, well embedded and likely sustainable."
Contact Dave Flessner at firstname.lastname@example.org or at 423-757-6340.