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Maryland lost its treasured 鈥渢riple triple-A鈥� bond rating Wednesday when a key bond-rating agency downgraded its assessment of the state鈥檚 creditworthiness to Aa1.
The move by Moody鈥檚 ends more than three decades in which Maryland held the highest bond rating from the three rating agencies: Moody鈥檚, Standard & Poor鈥檚 and Fitch. Moody鈥檚 had given Maryland a AAA rating every year since 1973 鈥� until Wednesday. Prior to Wednesday鈥檚 announcement, Maryland was one of 14 states to have the highest rating from the three major agencies 鈥� Fitch, Moody鈥檚 and Standard & Poors.
A triple-A rating means the state pays the lowest rates when it sells bonds to fund public projects. The downgrade means the state 鈥� and taxpayers 鈥� could pay more in interest on that borrowed money.
The change announced Wednesday could mean taxpayers will pay more in interest on the money the state borrows.
The next bond sale is scheduled for June 11.
The rating downgrade was not wholly unexpected.
A year ago, Moody鈥檚 reaffirmed the state鈥檚 AAA rating, but noted concerns in its report and from stable to negative. Among those concerns were looming structural deficits driven by programs including the Blueprint for Maryland鈥檚 Future education reforms.
Gov. Wes Moore (D) and legislative leaders this session set about taming a $3.3 billion projected deficit with cuts, cost shifts and $1.6 billion in taxes and fees. But as lawmakers were crafting a budget amid a chaotic first 100 days of the second term of Republican President Donald Trump, Moody鈥檚 issued another report seen as a potential harbinger of a rating downgrade.
That report listed Maryland as the state at as a new federal administration set about slashing agency budgets and employment.
Moore, Senate President Bill Ferguson (D-Baltimore City) and House Speaker Adrienne Jones (D-Baltimore County) took the rare step of meeting in person with Moody鈥檚 officials in Annapolis last week, to present a united front as they made the state鈥檚 case for a better rating.
Last month, Moody鈥檚 downgraded the District of Columbia from AAA to AA1. The firm cited impacts from federal workforce reductions as well as weakening demand for commercial real estate.
Besides Moody鈥檚, which gave Maryland an AAA rating in 1973, Standard & Poor鈥檚 first rated Maryland AAA in 1961 and Fitch has given it that raking since 1993.
This story will be updated.
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