Talbot County, Maryland

05/20/2025

Category: Finance

Talbot County has received high bond ratings from both Fitch Ratings and Moody’s Investors Service in preparation for the County’s upcoming bond sale on May 28, 2025, to support the design, construction, furnishing, and equipping of the Chapel District Elementary School located in Cordova, Maryland.

Moody’s Investors Service has affirmed the County’s Aa1 general obligation limited tax rating, citing continued strong financial performance supported by conservative budgeting and substantial reserves. Moody’s noted, “The Aa1 issuer rating reflects the county's improved financial position, driven by a well performing albeit volatile income tax.  Finances are poised to remain strong supported by a sound management team practicing conservative budgeting.”

Fitch Ratings has affirmed an AAA rating for Talbot County, the agency’s highest possible rating. In its analysis, Fitch highlighted:

“The 'AAA' IDR and GO rating affirmation reflects Talbot's 'AAA' financial resilience, underpinned by 'Ample' budgetary flexibility and Fitch's expectation that the county will sustain reserves at or above 7.5% of expenditures. As measured against the Fitch-rated portfolio, the county's long-term liability profile is assessed as 'Strongest', whereas the county's revenue volatility is among the 'Weakest', primarily due to the significant proportion of revenues derived from local income tax.

The rating also considers the county's 'Weak' population trend metric and 'Strong' demographic and economic level and size metrics, which include an unemployment rate consistently below the national average and educational attainment and median household income levels that surpass the median of Fitch's rated portfolio.”

Chuck Callahan, President of the Talbot County Council, stated, “These strong bond ratings show that Talbot County is in good financial shape. They reflect years of careful budgeting and responsible leadership. We’re proud of this recognition and grateful to our finance team for their hard work.”

Martha Darling Sparks, Director of Finance for Talbot County, emphasized the significance: “These ratings confirm that Talbot County is sustaining a solid financial position and the capacity to manage its resources responsibly.  Prudent budgeting practices and strong reserves continue to focus on the protection of the County’s financial health.”

This achievement comes on the heels of Talbot County’s recent adoption of a General Fund Reserve Policy, aimed at strengthening financial resilience and preparing for unexpected revenue shortfalls. The policy outlines four distinct reserve categories: Rainy Day Reserve, Risk Mitigation Reserve, Permanent Public Improvements Reserve, and Unassigned Reserve. The Rainy Day Reserve is intended to address significant fluctuations in revenues and expenditures, while the Risk Mitigation Reserve provides stability for more moderate changes. Aligned with the Talbot County Charter and recognized as a best practice by the Government Finance Officers Association (GFOA), the policy was adopted in February 2025 and is available for public review on the County’s website.

“This recognition reflects the County’s long-term commitment to responsible financial management,” added Clay Stamp, Talbot County Manager. “With the recent adoption of our General Fund Reserve policy and a continued focus on conservative budgeting, we are building a stable foundation that supports critical investments like education, infrastructure and public safety.”

For more information about the bond ratings or the upcoming bond sale, contact the Talbot County Finance Office at 410-770-8020.

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