Posted on 05/15/25
| News Source: FOX45
Baltimore, MD - May 15, 2025 - After months of speculation, Maryland officially lost its coveted triple A bond rating after Moody’s downgraded the state’s creditworthiness.
In the latest report, Moody’s assessment of Maryland’s creditworthiness was moved to Aa1, ending more than 30 years of the state holding the highest bond rating.
The triple-A bond rating allows Maryland to pay the lowest rates when it sells bonds to foot the bill for public projects and investments; now however, the rate will be higher, meaning taxpayers will have to shell out more.
The announcement comes on the heels of a tense legislative session where ultimately, Democrats in control of the General Assembly and the governor’s seat, moved to raise $1.6 billion in new tax and fee increases given a $3.3 billion budget deficit.
Gov. Wes Moore, Senate President Bill Ferguson, House Speaker Adrienne Jones, the state treasurer and comptroller all issues a joint statement in wake of the news, blaming President Donald Trump.
“To put it bluntly, this is a Trump downgrade. Over the last one hundred days, the federal administration’s decisions have wreaked havoc on the entire region, including Maryland,” the joint statement read. “Washington, D.C. received a credit downgrade. Thousands of federal workers are losing their jobs. Actual and proposed cuts to everything from health care to education will continue to exact an incalculable toll on Maryland and states across the country.”
A recent Moody’s report showed Maryland was at greatest risk of economic impact as a result of the federal cuts due to the large amount of federal workers who live in the state.
Republicans have been quick to criticize Gov. Moore and the other leaders in Annapolis for previous spending, and for blaming the current federal administration. House Minority Leader Jason Buckel said the downgrade news should come as no surprise.
“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,” Del. Buckel said via statement. Foisting the blame anywhere but at the feet of the excessive spending championed by Maryland’s Democratic party is, at best, disingenuous.”
Senate Minority Leader Steve Hershey and Senate Minority Whip Justin Ready said due to the downgrade, Maryland taxpayers will be on the hook for more any time the state spends to build a new school, roads, bridges, or any other public resource.
“Governor Moore promised to make this ‘Maryland's Decade,’ but he and Maryland's Democratic supermajority keep putting all their eggs in one basket, banking our entire economy on the federal government instead of building a diversified, competitive private sector,” said Sen. Ready.
The bond rating has been a point of pride for leaders of both political parties. Gov. Moore has faced criticism throughout his tenure, largely stemming from spending concerns. Before leaving office, former Gov. Larry Hogan – a Republican – warned the incoming leaders not to tap out the multi-billion dollar surplus.
“Since well before Governor Moore, Maryland governors—Democrats and Republicans alike—protected this AAA rating as a symbol of our financial integrity,” said Sen. Hershey. “But in just over a year, Governor Moore’s administration has eroded that legacy through unchecked spending and a lack of serious fiscal discipline. His feel-good messaging can’t cover up the fact that the choices made under his leadership have left Maryland weaker, not stronger.”
Democrats argue however, the last two years have shown “strong economic momentum,” with nearly 100,000 jobs created and low unemployment rates.
“As Moody’s acknowledged, state actions ‘closed a budget gap although the need for further corrective steps 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 Democratic joint statement continued.
Dr. Darius Irani, an economist and vice president of strategic partnership and research at Towson University, said the truth of whose fault the downgrade likely falls somewhere between what Democrats and Republicans are saying.
“Moody's has already been questioning Maryland's financial stability pre-inauguration. Post-inauguration, we’ve seen some job losses in the federal sector, some cutbacks on medical research grants, some cutbacks in some of the expenditures for contractors,” he explained. “So, it's kind of a combination of both. But the origin started, you know, before the Trump Administration took office.”
No one wants to be the governor that lost the triple-A bond rating, Dr. Irani said, but Gov. Moore now has to live with that reality. To regain the top-tier bond rating, Dr. Irani said there need to be economic shifts in the state.
“The state of Maryland is performing in the bottom third of all 50 states, it’s not a stellar state in terms of economic performance,” Dr. Irani said. “So, it needs to rethink its economic policies.
For everyday taxpayers, obviously now it means that basically the bonds issued by the state are going to cost more for the state to pay back, which means that either they need to raise taxes or to increase revenue, Dr. Irani added.
The next public bond sale is scheduled for June 11.