Moody's Ratings broke up Maryland's perfect set of triple-A general obligation ratings by downgrading the state on Wednesday to Aa1, citing its vulnerability to shifting federal policies and employment, as well as its elevated fixed costs.
The rating action, which included an outlook revision to stable from negative, came ahead of
Moody's noted that Maryland recently raised taxes and restrained expenditures to address overspending in various programs.
"These 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 rating agency said in a report. "The state's financial reserves remain strong by its historical standards, although lower than those of Aaa-rated states."
Maryland officials labeled the move "a Trump downgrade," saying that decisions by the federal administration have wreaked havoc on the entire region.
"As our people deal with the repercussions, our proximity to the nation's capital makes us particularly vulnerable to this administration's reckless policies," a joint statement from Gov. Wes Moore and other top state officials said. "We are proud of the work that Maryland residents who are federal workers provide to our nation, and we are disgusted that the Trump Administration continues to indiscriminately fire these dedicated public servants."
The statement also touted
The state still has triple-A GO ratings from Fitch Ratings and S&P Global Ratings.
Moody's also downgraded Maryland's annual appropriation obligation bonds for essential purposes and infrastructure financing intercept bonds to Aa2 from Aa1. The ratings on appropriation-backed bonds for less essential purposes, Built to Learn revenue bonds, and Bay Restoration Fund Revenue bonds, were lowered to Aa3 from Aa2.
In April, Moody's
