Maryland lost its triple-A bond rating from Moody’s on Wednesday, ending a streak of over 50 years during which the state used the rating as proof of strong financial management.
Moody’s downgraded Maryland’s credit rating to Aa1. Since 1973, Maryland had maintained the triple-A rating from Moody’s, allowing the state to borrow money at the lowest interest rates for infrastructure projects like roads and schools.
Moody’s explained the downgrade was due to the state’s weaker economic and financial performance compared to other top-rated states. The agency said this trend is likely to continue because of Maryland’s higher risk from changes in federal policies and jobs, along with its high fixed costs.
Governor Wes Moore and other top Maryland Democrats blamed the Trump administration for mass federal layoffs that have affected the region. Washington, D.C. recently experienced a similar downgrade.
“To put it bluntly, this is a Trump downgrade,” Moore said in a statement released with the state’s legislative leaders, Comptroller Brooke Lierman and Treasurer Dereck Davis, all Democrats. “Over the last one hundred days, the federal administration’s decisions have wreaked havoc on the entire region, including Maryland.”
Maryland Republicans saw the situation differently, criticizing the current state leadership.
Donald Trump gestures to the media reporters“Donald Trump didn’t downgrade Maryland’s bond rating — Annapolis Democrats did. And now they’re scrambling for someone else to blame,” said Republican Senator Steve Hershey, the Senate minority leader. “This is the result of reckless spending, bloated budgets, and an economy that’s been hollowed out by overregulation and overreliance on the federal government.”
Moody’s had earlier warned that Maryland is more at risk from federal budget cuts than any other state.
Lawmakers in Maryland recently wrapped up a difficult legislative session focused on balancing the budget. They addressed a \$3.3 billion deficit for the upcoming fiscal year by using tax hikes, budget cuts, and fund transfers.
They also told the governor’s budget office to monitor the impact of federal cuts, alert the legislature if those cuts reach \$1 billion, and suggest ways to respond.
Democratic leaders pointed out that Moody’s acknowledged the state had managed to close the budget gap, even though Maryland remains vulnerable to economic effects from federal job and funding reductions.
“Maryland still holds one of the highest possible credit ratings in the nation,” their statement said, “and as we have for decades, we will always pay our debts.”