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The bill attacks Gov. Gavin Newsom's executive order requiring state regulations phasing out the sale of new gasoline-powered cars and trucks by 2035.
The judge ruled the administration cannot freeze New York's federal funds in its bid to halt the controversial tolling program.
The rating agency cited concerns about limited unrestricted reserves for lowering its rating outlook for more than $1 billion of debt.
Mayor Mike Johnston, who announced furloughs and a hiring freeze, said an economic downturn spurred by President Donald Trump is major challenge for the city.
Maryland is preparing for upcoming bond sales as the state treasurer responds to a Moody's downgrade by suggesting the state part ways with the rating agency.