The 'AAA' rating on municipal debt has been awarded to 20 more counties by Standard & Poor's Ratings Service since its last report in January 2008, bringing the number to 67.

According to the rating service, the large increase reflects not only criteria changes, but also the inherent economic, financial and managerial strength of the counties, which have performed extremely well through the current recession.

Of the new 'AAA' rated counties, 14 were upgraded to 'AAA' from 'AA+', while the debt of six counties was rated 'AAA' right from the start. The number of 'AAA' rated counties has increased to 67 up from 42 in October 2006.

The counties are geographically dispersed, with the southeast region of the United States having the largest number ‘AAA’ rated counties (22).

The report’s authors note that their examination of 'AAA' rated counties' ratios shows that population size and geographic location are not significant factors. The 'AAA' rated counties come from 25 states (up from 21 states since 2008) across the country. There are what the authors view as large 'AAA' rated counties−such as Maricopa County, Ariz. (4 million residents); Harris County, Texas (3.98 million residents); and San Diego, Calif. (3.17 million residents); and what they consider to be small population-based counties such as Carver County, Minn. (population 86,236); Albemarle County, Va. (population 93,668); and Hanover County, Va. (population 103,025).

However, most large and small population-based 'AAA' rated counties share lower unemployment rates than the national average and good to very strong wealth levels.

Grouping counties by size and region reveals that per capita market values and wealth levels generally tend to be higher in the northeast and southeast than in other regions. The fact that these two statistics move in tandem indicates a direct link between the wealth of a county and property values. Even though large population-based counties generally have lower wealth levels than the median for 'AAA' rated counties, it is not impossible for them to achieve the highest rating category.

The average overall net debt per capita for the 'AAA' rated counties is $2,816 and the median is $2,611. The 'AAA' rated counties have what we consider a low overall debt-to-market value average of 2.6% and a median of 2.2%, which has only increased slightly from 1.9% in 2008. The 'AAA' rated counties generally pay off debt at an above-average rate, with about two-thirds of long-term debt retired within 10 years.

While such above-average debt retirement schedules can increase fixed costs by accelerating repayment, in many cases the 'AAA' rated counties have policies supporting faster amortization of debt. Typically, less than 10% of the 'AAA' rated communities' general fund and debt service budgets are dedicated to debt service.