This report does not constitute a rating action. Georgia counties and municipalities have demonstrated generally stable credit characteristics over the past year, a trend we expect will continue despite rising economic uncertainty. In our view, credit stability is supported by strong financial positions as local budgets are largely funded by property tax revenue, robust fund balance levels, and overall low debt burdens with manageable debt service costs given availability of the special purpose local option sales tax (SPLOST) programs to fund capital needs with dedicated sales tax revenue. While challenges exist, such as higher service and infrastructure demands associated with population growth, slowing economic growth trends and below-average funding ratios for many pension plans that could result in escalating costs
