Maryland's cost to borrow money will soar after credit agency Moody's downgraded the state's credit rating from the coveted AAA to Aa1 today. Moody's ratings system charitably denotes Aa1 as being a "high quality" investment, as opposed to AAA's recognition of a "highest-quality" investment. In practice, however, the lower grade means you - the taxpayer - will pay a higher rate of interest when Maryland issues bonds to pay for infrastructure projects, for example.
The rating downgrade was first reported by Maryland Matters, which noted that today's change ends a remarkable streak of the state holding a AAA rating from Moody's since 1973. That success was sustained under Democratic and Republican governors alike. Maryland Governor Wes Moore (D) attempted to deflect blame to Donald Trump in a rant on X this afternoon, despite frittering away a $5.5 billion budget surplus left to him by previous governor Larry Hogan (R).
Maryland has been hamstrung by the fiscally-deadly combination of out-of-control spending, the flight of the rich and retirees to lower-tax states, and a failure to lure any major corporate headquarters to the state this century. Yet, Moore and the Maryland General Assembly have continued to support the controversial Blueprint for Education, a state teacher's union-driven boondoggle every rational budget expert warned could lead to fiscal disaster down the road.
Our state is now closer to that disastrous destination with today's credit downgrade. Maryland was already barely able to close a budget deficit this year. What will it do next year, now that borrowing money will cost significantly more, and its economy remains moribund?
Majority of Maryland residents believe Maryland is heading in wrong direction.
ReplyDeletehttps://www.wmar2news.com/local/poll-gov-moores-approval-drops-as-majority-of-marylanders-believe-state-headed-in-wrong-direction
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.’
DeleteMaryland 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.”
Moody’s literally cited risks tied to federal workforce cuts for the downgrade. It's fair to blame Trump. Facts matter.
ReplyDeleteLooks like Blueprint for Maryland is breaking the bank.
Delete10:26/11:23: The biggest factor cited by Moody's is overspending, on Blueprint in particular, which Moody's cites directly. Trump has zero to do with Blueprint, a state initiative.
ReplyDeleteAnd yet Moody’s still felt the need to cite the risks associated with federal workforce cuts. It's not one single thing. It's fair to say Trump/DOGE share in the blame.
Delete2:08: Well, now we're in agreement - it is certainly one of the factors that led to the downgrade. You're making a lot more sense with that statement, compared with those who are placing 100% blame on Trump.
Delete