Los Angeles County achieved its overall highest credit rating in its recorded history after a leading global credit rating agency, Fitch Ratings, increased the County’s long-term credit rating from AA to AA+.

Fitch Ratings joins two other leading national credit ratings firms, Standard & Poor’s Global Ratings Service and Moody’s Investors Service, in determining that L.A. County’s long-term financial outlook is strong and positive. Fitch attributed the credit ratings upgrade to the combined strength of L.A. County’s continued solid revenue streams, strong economic base, moderately low long-term liability burden and the ongoing progress toward addressing unfunded pension liabilities.

This is the third time one of the credit rating agencies has increased L.A. County’s ratings under the leadership of the current Board of Supervisors and Chief Executive Officer.

The announcement came after the County’s annual meeting with each of the three credit agencies in New York on May 23, 2019. L.A. County was represented by the Chair of the Board of Supervisors, Janice Hahn; Chief Executive Officer Sachi A. Hamai; and representatives from the Treasurer and Tax Collector, Auditor-Controller and Department of Health Services.

Fitch, Standard & Poor’s and Moody’s provide independent assessments of the creditworthiness of the County as a borrower, which investors use as a guide to evaluate credit risk.

“L.A. County is unlike any other county in size and responsibilities which range from fighting fires, regulating businesses, providing health services and building affordable housing,” said Joseph Kelly, Treasurer and Tax Collector for the County of Los Angeles. “The credit rating upgrade is especially gratifying given the complexity of the County’s finances and the number of economic variables outside of the control of the County government. So, the credit upgrade is a positive reflection of both our conservative budgetary policies and the strategic social goals of our Board of Supervisors and Chief Executive Officer.”

Government credit ratings are similar to consumer FICO or credit scores. The County’s status as a low credit risk means the interest rate it pays to borrow money is lower than it would be otherwise, thus providing flexibility and security in funding vital services for the County’s constituents. When the County obtains a low-interest rate loan, all County residents benefit.

The Treasurer and Tax Collector estimates that each increase in L.A. County’s long-term credit rating could reduce interest expense by up to $2 million for every $100 million borrowed on a long-term debt issuance.

“Our vision of improving life for all County residents is through our strong financial discipline and the Board’s commitment to responsible governance,” said CEO Hamai. “Our budget continues to strike a balance between programmatic priorities and fiscal responsibility.”

Supervisor Hahn added: “L.A. County’s Board of Supervisors is demonstrating that we can provide services that improve lives, and effectively tackle big issues such as cleaner water, justice reform and affordable housing and homelessness, while doing what we must do to ensure our financial future and flexibility,”

L.A. County has exhibited strong population growth, declining unemployment, improving wealth levels and a steady growth in consumer spending. In addition, L.A. County has a diversified property tax revenue base and assessed valuation of properties that continues to grow. The net assessed value of properties in the County is $1.6 trillion, which represents a 5.8% increase from Fiscal Year 2018-19.