Press Release|Public Finance
KBRA Assigns AAA Rating to Harris County, TX Permanent Improvement Refunding Bonds, Series 2025A and Unlimited Tax Road Refunding Bonds, Series 2025A; Affirms Related Ratings
9 Jul 2025 | New York
KBRA assigns a long-term rating of AAA to the Harris County, TX Permanent Improvement Refunding Bonds, Series 2025A and Unlimited Tax Road Refunding Bonds, Series 2025A. KBRA additionally affirms the long-term rating of AAA for the County's outstanding Limited Tax Obligations and Unlimited Tax Obligations. The rating Outlook is Stable.
Key Credit Considerations
The ratings reflect the following key credit considerations:
Credit Positives
- Sizable and diversifying economy, centered around the nation’s fourth largest city, that has benefitted from above average property tax base growth.
- Strong financial profile supported by generally favorable operations and considerable balance sheet resources, derived from stable property tax collections.
- Robust financial management practices, including a comprehensive budgeting process, frequent intra-fiscal year monitoring, and the maintenance of prudent reserves.
- The County electorate in November 2024 approved a permanent increase in the O&M property tax levy for the Harris County Flood Control District that will provide an additional $100 million each year toward activities mitigating future flood risks and protecting the property tax base.
Credit Challenges
- Susceptibility to significant storm activity given its domicile on Texas’s Gulf Coast, as evidenced by Hurricane Harvey (2017) and the less severe but still significant disaster events of 2024 including Hurricane Beryl.
- Flexibility to increase the O&M property tax levy without voter approval is constrained by SB 2 of 2019 which reduced the growth cap on O&M property tax assessments for existing property to 3.5% annually compared to the prior 8% limit. This limitation may pressure the County’s budgetary balance over time.
Rating Sensitivities
For Upgrade
- Not applicable for this rating level.
For Downgrade
- Significant deterioration in operating reserves and liquidity.
- A secular decline in the socioeconomic profile of the County.
To access ratings and relevant documents, click here.