ANNAPOLIS, MD—Maryland lost its coveted AAA bond rating on Wednesday when Moody’s Investors Service downgraded its assessment of the state’s creditworthiness to Aa1, ending a more than three-decade streak of top-tier ratings.

This downgrade means Maryland is no longer among the 14 states that hold the highest rating from all three major bond-rating agencies: Moody’s, Standard & Poor’s, and Fitch. Maryland had held a AAA rating from Moody’s every year since 1973. A triple-A rating means lower interest rates when the state sells bonds for public projects.

The change could lead to higher interest payments for the state when it borrows money for public projects, potentially impacting taxpayers. The next bond sale will occur on June 11.

The downgrade follows a year of warnings from Moody’s. The agency had previously lowered the state’s outlook from stable to negative, citing concerns about structural deficits driven by programs like the Blueprint for Maryland’s Future education reforms.

Despite efforts by Governor Wes Moore and legislative leaders to address a $3.3 billion projected deficit with cuts, cost shifts, and new taxes and fees, Moody’s issued a report in March identifying Maryland as the state at highest risk for economic problems due to potential federal budget cuts and employment reductions, according to Maryland Matters.

In a last-ditch effort to maintain the rating, Moore, Senate President Bill Ferguson, and House Speaker Adrienne Jones met with Moody’s officials in Annapolis last week.

On Wednesday, Governor Wes Moore, Lieutenant Governor Aruna Miller, Treasurer Dereck Davis, Comptroller Brooke Lierman, House Speaker Adrienne Jones, and Senate President Bill Ferguson released a statement on the Moody’s downgrade, bizarrely pointing the finger at the Trump administration:

“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. 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.

“As our people deal with the repercussions, our proximity to the nation’s capital makes us particularly vulnerable to this administration’s reckless policies. 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.

“Last week, we met with Moody’s to discuss our collective work protecting the full faith and credit of the State of Maryland. Together, we turned a deficit into a surplus, gave the middle class tax relief while still raising critical revenue through strategic tax reforms, and reduced spending by over $2 billion – the largest amount that’s been cut in a Maryland state budget in 16 years. Maryland’s creditworthiness has only been strengthened by our collective work on this budget.

“Over the last two years, Maryland has seen strong economic momentum. We’ve created nearly 100,000 jobs, seen some of the lowest unemployment rates in the nation, and experienced one of the fastest job growth rates. Yet, this was not enough to overcome a downgrade caused by the recent actions of the Trump Administration.

“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.’

“Maryland 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.”

This article was written with the assistance of AI and reviewed by a human editor.

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