As previously reported on Conduit Street, Maryland and its local governments managed to avoid a downgrade from the bond rating agencies amidst a federal government downgrade and likely significant budget cuts to military and other governmental programs that will affect the State. However, as a February 6 MarylandReporter.com article reports, the State could still lose its prestigious AAA based on the actions of the federal government. If such a move occurs, it may trigger review of local government bond ratings as well.
The article recounts the testimony of State Treasurer Nancy Kopp before the House Appropriations Committee on February 3:
“It’s very frustrating because everything you do, everything we do, they agree is top notch,” Kopp said. “But we cannot control the United States Congress.” …
Kopp told the Appropriations Committee that Moody’s may automatically downgrade Maryland’s bond rating if it decides to downgrade the federal government. She said that the state is trying its hardest to ensure that does not happen. …
State officials are working to get Moody’s analysts to consider Maryland as its own entity, and if necessary, give the state a higher rating than the federal government.
