Second bond rating agency reaffirms highest credit rating for Maryland

A second bond-rating agency has reaffirmed its highest credit rating for Maryland helping offset a downgrade by a third agency just weeks before a scheduled billion bond sale by the state The AAA rating from Standard Poor s follows a similar rating from Fitch two weeks ago Standard Poor s one of three firms that Maryland hires to rate its creditworthiness in advance of annual bond sales issued its rating with a stable outlook for the state but also with a warning The stable outlook reflects our expectation that the state will make timely adjustments to achieve a structural balance and adequate cash reserves by proactively managing economic and budgetary risks that arise the account disclosed The back-to-back AAA ratings from Fitch and Standard Poor s help take the sting out of Moody s analysis which downgraded the state from Aaa for the first time in more than years to Aa But state bureaucrats note that Moody s has downgraded several other jurisdictions in the region in recent weeks including the United States and say the latest ratings prove that Maryland s financial healthcare is strong The Fitch and S P ratings reaffirmed what we have been saying all along about the state s sound fiscal management and ability to adapt to an ever-changing federal bureaucracy state Treasurer Dereck Davis D reported through a spokesperson Wednesday morning The assessment comes before a June sale of nearly billion in bonds Money raised in the sale will be used by the state to pay for large infrastructure projects including school construction At a press conference in Baltimore Wednesday Senate President Bill Ferguson D-Baltimore City called the earlier Moody s rating an outlier that reflected a Trump-based downgrade It s very clear because of what happened with the United States and the bonds of the United States now being downgraded just unfortunately the same way that Maryland was with Moody s Ferguson explained I think that Fitch and S P made clearly the right choice that not only is it triple A but we are stable because we make hard choices when we need to in order to grow our economic activity Ratings issued by the three agencies Fitch Moody s and Standard Poor s determine what interest rate the state and taxpayers pay for borrowing money The latest rating in several tactics is similar to one issued by Fitch including words of caution that Standard Poor s could downgrade the state under certain conditions Davis To hell with Moody s following its downgrade of state credit We could revise our outlook to negative or lower the rating within the two-year outlook period if the state significantly relies on nonrecurring measures to balance its budget draws down reserves to a level that is unlikely to be meaningfully replenished or increases debt and other liability metrics to a level that no longer aligns with the current rating the firm wrote in its statement We could also lower the rating if the state s overall wealth and income employment and population levels materially trend in a persistently unfavorable direction due to crucial weakness in the cabinet sector it mentioned Such cautions are common from bond rating agencies For decades Maryland enjoyed AAA ratings from all three agencies Standard Poor s gave Maryland its first AAA rating in followed by Moody s in and Fitch in Those ratings continued every year until this spring making Maryland one of a handful of states to boast the highest ratings of all three Political leaders in the state touted the triple AAA ratings as proof of strong fiscal management Others stated the ratings reflected another reality a willingness among Maryland s leaders mostly Democrats to raise taxes to pay its debts The ratings period this year was more tense Inadequate acted as if the state was guaranteed the highest ratings of all three with Moody s of the the majority concern The firm in its overview had reaffirmed its Aaa rating for Maryland but downgraded the state s outlook from stable to negative In March Moody s issued a statement naming Maryland the state at highest peril for economic problems from Trump administration cuts to federal budgets and jobs When the state met with the three firms earlier this month Moody s was the only one to schedule an in-person visit It was attended by the governor the Senate president and House speaker an exceptional occurrence and an acknowledgement of the seriousness with which state representatives were treating the situation YOU MAKE OUR WORK ACHIEVABLE AID State leaders commented in the days after the meeting that they held they had addressed the budgetary concerns from the statement But within days of that meeting a quick turnaround that surprised a multitude of in state cabinet Moody s had downgraded Maryland to Aa with a stable outlook Moody s appeared to put more weight on federal actions and the reliance of the state s economic system on federal employees contractors and agencies Representatives all Democrats including Davis Ferguson Gov Wes Moore Comptroller Brooke Lierman and House Speaker Adrienne Jones issued a joint announcement decrying the rating downgrade Their comment blamed Republican President Donald Trump who has focused the first months of his second term on the elimination of federal agencies and draconian budget and employee reductions A week ago Davis whose office oversees the issuing of bonds noted to hell with Moody s and implied that the state may no longer need three bond rating reviews Moody s which is paid more than annually for its review was potentially on the chopping block Maryland Matters reporter Danielle J Brown contributed to this analysis The story was updated at p m Wednesday to include a response from Senate President Bill Ferguson figure tipContainer socContainer subscribeShortcodeContainer donateContainer display none vital youtubeContainer position relative padding-bottom padding-top px height overflow hidden margin-bottom px youtubeContainer iframe video-container object 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