KBRA Affirms AAA Rating with Stable Outlook for Orange County, FL Sales Tax Revenue Bonds
5 Jun 2026 | New York
KBRA affirms the long-term rating of AAA with a Stable Outlook on Orange County, Florida's Sales Tax Revenue Bonds.
The long-term rating continues to reflect Orange County’s (the County’s) exceptional coverage of maximum annual debt service (MADS) on Sales Tax Revenue Bonds, the historical resilience and growth of Sales Tax Proceeds, and the presence of ample reserves in the Sales Tax Trust Fund. While the County’s unique, tourism-focused economy has repeatedly recovered from exogenous shocks, it remains susceptible to disruption due to the potential for declines in leisure travel. Large-scale, multi-year declines in tourism could have an outsized impact on economic activity related to tourism, and thus on County operating revenues, including Sales Tax Proceeds.
The Sales Tax Revenue Bonds (the Bonds) are secured on a parity basis by a pledge of and lien on the portion of the Local Government Half-Cent Sales Tax collected within Orange County and distributed monthly from the Local Government Half-Cent Sales Tax Clearing Trust Fund of the State Treasury (Sales Tax Proceeds).
The State of Florida collects a 6.0% statewide sales tax on retail sales of most tangible personal property, admissions, transient lodgings, commercial rentals, and motor vehicles. Under the Local Government Half-Cent Sales Tax program, State sales taxes collected within a county are distributed to the county and its local units based on relative population. Local Government Half-Cent Sales Tax collections are distributed monthly to the County from the Local Government Half-Cent Sales Tax Clearing Trust Fund of the State Treasury, and pursuant to the Master Resolution, are deposited upon receipt into a special fund designated as the Sales Tax Trust Fund, for which the elected County Comptroller acts as trustee.
The Stable Outlook reflects our expectation, based on historical Sales Tax Proceeds that debt service coverage ratios will remain robust throughout the 2032 final maturity of the remaining outstanding Sales Tax Revenue Bonds. Balances in the Sales Tax Trust Fund are expected to continue to provide expenditure flexibility, should recessionary, inflationary impacts or other externalities create a temporary environment of declining Sales Tax Proceeds. Given the desirability of the Central Florida region to business relocation and in-migration, KBRA believes further long-term diversification of the employment base and continued population growth are likely, both of which will benefit the sales tax base.
Key Credit Considerations
Credit Positives
- Sales Tax Proceeds provide ample MADS coverage.
- The historically strong balance in the Sales Tax Trust Fund lends important revenue flexibility and liquidity.
- Sales Tax Revenue Bond debt levels are low. Outstanding debt is scheduled to fully amortize within ten years.
Credit Challenges
- The leisure and hospitality sector, which contributes to much of the County’s economic activity, is subject to macro-economic and other large-scale event risks, which could contribute to volatility in Sales Tax Proceeds.
Rating Sensitivities
For Upgrade
- Not Applicable
For Downgrade
- Significant deterioration in MADS coverage.
- Negative trend in receipt of Sales Tax Proceeds due to significant economic disruption or major modification of the statutory distribution formula.
To access ratings and relevant documents, click here.