LIHU‘E — The County of Kaua‘i’s finances are in good shape as it navigates its way through a post-pandemic era rocked by sky-high inflation and rising interest rates
Moody’s Investors Service, a bond credit rating business, assigned an Aa2 issuer rating to the county, and confirmed an Aa2 general obligation unlimited tax rating, the County of Kaua‘i Department of Finance said in a statement on Thursday, Dec. 22.
In issuing the rating, which only ranks below an Aaa and Aa1 on Moody’s long-term rating scale, the business cited the county’s healthy finances and wide latitude in determining its largest general fund revenue source.
“These credit ratings by Moody’s are a testament to the work of our Finance Department,” said Mayor Derek S.K. Kawakami in a statement.
“We thank our team for their good management practices and ability to adjust when needed, and the partnership of our County Council. This was especially evident during the height of the pandemic.”
While the county’s economy retracted considerably in fiscal year 2020, in large part due to the near shutdown of its tourism industry, it rebounded at a rate stronger than the state and United States in 2021.
Looking ahead, the county’s finances are forecast to remain strong in the medium term because of its conservative management and ability to adjust revenues, Moody’s said.
“An Aa2 rating is assigned to municipal securities of high quality with very low credit risk,” said Department of Finance Director Reiko Matsuyama in a statement.
“The county demonstrated a strong fund balance and healthy liquidity levels, but carries above-average leverage due to obligations associated with our employee retirement plans.”
The Aa2 rating for the County of Kaua‘i comes amid a backdrop of intense inflation and soaring interest rates that have suffocated businesses, consumers and governments.
The Federal Reserve has raised its federal funds rate multiple times this year, with hikes as steep as 75 basis points in June, July, September and November, as it tries to tame inflation.
Those rate hikes have eaten away at the purchasing power of consumers, as the cost to finance everything from cars to houses has soared across the country.
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Wyatt Haupt Jr., editor, can be reached at 808-245-0457 or whaupt@thegardenisland.com.
