Moody's Ratings on Wednesday downgraded Maryland's credit ratings in several areas due to "economic and financial under performance compared to Aaa-rated states."
Issuer ratings and general obligation (GO) bonds have both been downgraded from Aaa to Aa1.
The Maryland Department of Transportation's Consolidated Transportation Bonds were also downgraded to Aa1.
An Aa1 rating is the first rating under Aaa, the top possible rating.
These ratings are indicators of how the state is able to pay back its debt according to Moody's. The downgraded rating shows an increase in risk for investors loaning money to the state.
“To put it bluntly, this is a Trump downgrade," Governor Wes Moore said in a joint statement along with the Lieutenant Governor, state Treasurer, House Speaker, and Senate President. "Over the last one hundred days, the federal administration’s decisions have wreaked havoc on the entire region, including Maryland."
Leaders of the Republican Party in Maryland felt differently.
“Donald Trump didn’t downgrade Maryland’s bond rating—Annapolis Democrats did," said Senate Minority Leader Steve Hershey."
“Today’s news is sobering, but it is a direct result of decades of fiscal mismanagement by the Democratic supermajority in Annapolis and their obeisance to special interest groups like the state teachers’ union,” said House Minority Whip Jesse Pippy.
“This should come as no surprise to anyone who has been paying attention to Maryland’s fiscal challenges,” said House Minority Leader Jason Buckel. “A year ago, Moody's changed Maryland's fiscal outlook to 'negative' due to our looming deficits and Blueprint spending. This was well before President Trump’s reelection and before any federal retrenchment."
Moody's did add that the outlook for the state has been revised to 'stable.'
The organization added that while the state did address "a trend of overspending in various programs... the need for further corrective actions may arise directly from federal funding cuts or the economic consequences of federal layoffs and other policy shifts, to which Maryland has a very high degree of exposure."
The joint statement from state leadership added, "Maryland still holds one of the highest possible credit ratings in the nation, and as we have for decades, we will always pay our debts. We have taken proactive steps to protect our people and fortify our state in the face of federal headwinds. And together, we will continue to answer crisis in Washington with courage in Maryland.”
