For the first time since 1973, Moody’s has downgraded Maryland’s credit score, based on what it sees as negative economic indicators for the state.
Moody’s Ratings is one of three agencies that rate the creditworthiness of government agencies. The assigned ratings indicate the credit risk of the entity in question.
What is Maryland’s Moody’s rating?
Moody’s downgraded Maryland’s creditworthiness rating from Aaa to Aa1, a change that has not happened since Maryland was given the Aaa designation in 1973, according to the Treasurer’s Report to the Legislative Policy Committee issued in June 2024.
Why was the rating downgraded?
According to the Baltimore Banner, Moody’s said that the downgrade was driven by Maryland’s “economic and financial underperformance” compared to top-rated states, “which is expected to continue given the state’s heightened vulnerability to shifting federal policies and employment, and its elevated fixed costs.”
What do Moody’s ratings impact?
Similar to how a person’s credit score affects the interest rates they receive when borrowing for homes or vehicles, Maryland’s reduction in credit standing will cause the state to face higher interest costs when borrowing money through bond issuance for infrastructure projects.
Maryland Governor Wes Moore posted to social media about the downgrade, saying that the decision was another decision by the Trump administration that “wreaked havoc” on Maryland.
“Over the last two years, our momentum has been undeniable. 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,” Moore wrote. “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. This was not enough to overcome a Trump downgrade.”
Maryland’s economic challenges
Moore has been working to resolve Maryland’s $3.3 billion budget deficit, a task that prompted multiple shifts in budget priorities.
Budget changes included two new tax brackets for the state’s highest earners, and the largest amount of cuts from a state budget in 16 years.
Compounding this struggle is Maryland’s efforts to provide support to federal workers laid off due to the Trump administration’s reduction in the size of the federal workforce.
Moore said Maryland has approximately 160,000 federal civilian employees, representing about 6% of the state’s total jobs as of March 2025.
In April, Moore announced expanded resources for former federal employees looking to find new jobs.
