Press Release|Public Finance
KBRA Assigns Harris County Hospital District (TX) Series 2025 Limited Tax Bonds AA+, Stable Outlook
23 Apr 2025 | New York
KBRA assigns a long-term rating of AA+, with a Stable Outlook, to the Harris County Hospital District, TX (the "District") Limited Tax Bonds, Series 2025.
Key Credit Considerations
The rating was assigned because of the following key credit considerations:
Credit Positives
- The District is the primary safety net healthcare provider in the County and plays an essential role within the County’s public health mission.
- A growing tax base continues to generate strong property tax revenues for the District, thus supporting voter-authorized debt obligations.
- District’s ad valorem tax rate remains well below the constitutional limit.
Credit Challenges
- Large capital plan that will place upward pressure on operating expenses, debt requirements and the tax levy.
- Managing potential operational challenges should federal Medicaid funding materially decline.
Rating Sensitivities
For Upgrade
- Material growth in the property tax base, which supports the District’s revenue and operations and bolsters the taxing capacity within the Constitutional levy limit.
For Downgrade
- Significant secular deceleration or declines in tax base growth pressuring ad valorem tax support.
- Trend of sharply increasing operating deficits requiring substantial increases in the M&O tax rate.
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