Maryland maintained a AAA bond rating from Fitch and Standard & Poor’s, but was downgraded to Aa1 by Moody’s. (Maryland Matters file photo)
In his coverage of the downgrade of Maryland’s credit rating by Moody’s from the coveted AAA to AA1, Bryan Sears pointed to Moody’s acknowledgement of Maryland’s “wealthy and diverse economy,” solid financial planning and proactive management by officials, including slowing expenditures and raising new funds.
But the report also noted that Maryland was particularly vulnerable to “shifting Federal policies and employment” in comparison to other states with triple-A ratings: Delaware, Florida, Georgia, Missouri, North Carolina, Ohio, South Dakota, Tennessee, Texas, Utah and Virginia.
In plain-speak, Maryland’s administration was well equipped to handle any organic financial issues arising from budgetary deficits, and/or ambitiously funded programs. But our reliance on federal jobs meant that no one could foresee or plan for such eventualities.
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Among all the states with a triple-A rating, Maryland’s economy is the only one which is dominated by the government sector. Being a small state and adjacent to the nation’s capital, Maryland’s largest source of income is income tax. Almost one in 10 Maryland workers is a federal employee. The only variable NOT in control of the state administration is the employment of federal workers.
It isn’t hard to see the connection.
Republican delegates and senators who tout Moody’s warnings about Maryland’s rating prior to this current federal administration taking charge are forgetting that the programs with high price tags, like the Blueprint for Maryland’s Future, were hit because of the COVID-19 economy.
We barely had time to come up to the surface to take a breath of air before being submerged again by this second Trump administration! The GOP needs to take a hard look at themselves, and their blind obeisance to the walking body of malfeasance they regard as their president.
Here is the bottom line: Moody’s downgraded Maryland’s credit rating because, despite the Moore administration’s best efforts, they could not fix the damage done by DOGE and their dismantling of federal government.
Maryland, D.C. and Virginia have the maximum number of federal employees – both Maryland and D.C. had their ratings downgraded. Virginia is a much larger state and has other economic avenues to offset the loss of federal jobs, even though it, too, has taken a substantial hit to its economy.
Blame, if it is to be assigned, lies with the Trump administration and its hatchet approach to federal infrastructure. Believe me, the damage goes far beyond a credit rating — the United States will be feeling the effects of this sabotage for decades to come.
Fitch has since released its ratings on Maryland, and Standard & Poor’s followed on Wednesday. Maryland continued to maintain a triple-A ratings with both firms.
So let’s all take a deep breath, and return to resisting the illegal and unconstitutional actions of this federal administration.