Maryland lost its treasured “triple triple-A” bond rating Wednesday, when a key bond-rating agency downgraded its assessment of the state’s creditworthiness to Aa1.

The move by Moody’s ends more than three decades in which Maryland held the highest bond rating from the three rating agencies: Moody’s, Standard & Poor’s and Fitch.

Moody’s had given Maryland an Aaa rating every year since 1973 — until Wednesday. The rating agency also downgraded half a dozen other state borrowing programs in its report.

In its reasoning for the downgrade, Moody’s said Maryland continues to have a “wealthy and diverse economy,” solid financial planning and that officials had recently addressed budget problems “through a combination of tax increases and restraints on expenditures.” But those were not enough to offset concerns about looming financial challenges, the report said.

“The downgrade was driven by economic and financial underperformance compared to Aaa-rated states, which is expected to continue given the state’s heightened vulnerability to shifting federal policies and employment, and its elevated fixed costs,” Moody’s wrote in its report.

Prior to Wednesday’s announcement, Maryland was one of 14 states to have the highest rating from the three major agencies — Fitch, Moody’s and Standard & Poors.

In a forceful response to the downgrade, the state’s top five Democrats — Gov. Wes Moore, Senate President Bill Ferguson (Baltimore City), House Speaker Adrienne Jones (Baltimore County), Comptroller Brook Lierman and Treasurer Dereck Davis — laid the blame on the White House doorstep of Republican President Donald Trump

“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,” their joint statement said.

“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,” the statement said.

But Maryland Republicans said warnings about the state’s financial problems came well before Trump, and said the downgrade should be a signal that the state cannot tax its way out of problems anymore.

“This is Moody’s saying that Maryland’s propensity to raise taxes is not enough any more,” Senate Minority Leader Stephen S. Hershey Jr. (R-Upper Shore) said Wednesday.

“People can move. They can work in other states,” he said. “They (Moody’s) are looking at the potential for economic growth in the state and it’s not enough.”

House Minority Leader Jason C. Buckel (R-Allegany) pushed back on the suggestion that it’s “a Trump downgrade.” He pointed to warnings from fiscal analysts in November and again in January of billions in structural budget gaps driven by higher spending on Medicaid, child care subsidies and, in later years, the Blueprint for Maryland’s Future education reforms.

Last year, Moody’s itself cited “escalating expenditures in education and healthcare, combined with elevated retirement benefit liabilities” when it reaffirmed the state’s Aaa bond rating, but downgraded the outlook from stable to negative. Wednesday’s downgrade “should come as no surprise to anyone” who follows the state budget, Buckel said.

“This was well before President Trump’s reelection and before any federal retrenchment. Foisting the blame anywhere but at the feet of the excessive spending championed by Maryland’s Democratic party is, at best, disingenuous,” Buckel said in a statement.

Decades without a downgrade

Besides Moody’s, which gave Maryland an Aaa rating in 1973, Standard & Poor’s first rated Maryland Aaa in 1961 and Fitch has given it that ranking since 1993.

Maryland maintained its Aaa rating from Moody’s through five recessions — including the Great Recession — the 2013 federal budget sequestration, and the COVID-19 pandemic. But Trump’s approach in his first 100 days, focused on slashing federal spending and employment and moving to wipe out entire programs or agencies, has rattled that confidence.

A triple-A rating means the state pays the lowest rates when it sells bonds to fund public projects. The downgrade means the state — and taxpayers — could  pay more in interest on the money the state borrows.

The next bond sale is scheduled for June 11.

It is not yet clear if the shift by one agency will increase the state’s interest rate or decrease or eliminate bond premiums — fees bond buyers pay the state in return for higher interest rates and a guarantee that the bonds will not be called for specific time periods. Premiums can be used to offset the higher rates the state pays, but that upfront cash has been used in the past for other purposes.

The downgrade is a blow to Democrats who for years have pointed to the state’s high credit ratings as a symbol of strong fiscal management. For others, it was seen as a sign the rating agencies were confident in a willingness among Maryland’s leaders — mostly Democrats — to raise taxes to pay its debts.

The rating downgrade was not wholly unexpected.

The warnings were there

When Moody’s last year reaffirmed the state’s AAA rating but lowered the state’s outlook from stable to negative, it cited concerns about looming structural deficits driven by programs like the Blueprint for Maryland’s Future.

The 2024 report noted the state’s high costs but relatively stable personal income tax base that was bolstered by federal employment and its proximity to the District of Columbia.

But Moody’s expressed concerns then about Maryland’s pension liabilities, and “above average debt burden.” The agency also worried about Maryland’s “vulnerability to swings in federal spending.”

Last year’s rating and negative outlook incorporated the “difficulties Maryland will face to achieve balanced financial operations in coming years without sacrificing service delivery goals or increasing the tax burden on individual and corporate taxpayers.”

Moody’s analysts warned then that a downgrade could come if there was further economic deterioration that resulted “in deficits, fund transfers and reserve draws.” Analysts also raised concerns about an “insufficient plan” to quickly replenish reserve funds or reach a structural budget balance.

Cuts to federal jobs or the federal government’s “role in the state’s economy” might also cause a downgrade, Moody’s wrote in its 2024 report.

Administration officials earlier this year expressed concern about a potential downgrade, but thought that solving the state’s immediate financial concerns — more than $3 billion in structural deficits in fiscal 2026, and a nearly equal amount the following year — would satisfy the rating agency and protect Maryland’s credit rating.

External pressures come to bear

But as lawmakers and administration officials were negotiating cuts, cost shifts and $1.6 billion in taxes and fees, Moody’s issued another warning report. The March report listed Maryland as the state at highest risk for economic problems as the Trump administration slashed agency budgets and jobs.

The budget finalized by lawmakers reduced general fund spending — the portion paid directly by Maryland taxpayers — by $400 million, despite overall growth of about 1% when all funding sources are included.

That included more than $1 billion in combined one-time general fund actions and another $800 million in transfers from various accounts to the general fund budget, in addition to tax and fee increases.

The spending plan also eased the burden on the state by shifting some costs, including teacher pensions and costs for property tax assessments, to local governments.

The result was the elimination of the projected structural deficits for fiscal 2026 and 2027.

But those deficits return the following year and grow to more than $3 billion by 2030, according to projections included in a presentation to the bond rating agencies. All of those deficits are related to expected education spending that is part of the Blueprint plan.

Officials told the rating agencies that 70% of the costs could be controlled by the state.

Soon after the 2025 session ended, Moody’s issued a report downgrading the credit rating of the District of Columbia from AAA to Aa1. The firm cited impacts from federal workforce reductions as well as weakening demand for commercial real estate.

“I think a lot of us looked at that report and thought you could replace DC with Maryland because Maryland is going through all the same challenges,” said David Turner, a Moore spokesperson.

Presenting a united front

Last week, the state hosted all three bond rating agencies as part of its annual reviews ahead of the state’s June bond sale. Only Moody’s came to Maryland for face-to-face meetings; Fitch and Standard & Poor’s representatives met with state officials virtually.

Typically, those meetings include the state treasurer, comptroller, budget secretary, the director of the Bureau of Revenue Estimates and legislative analysts. But Moore, Ferguson, Jones took the rare step of meeting in person with Moody’s last Tuesday. The three also made brief comments as part of a united front in hopes of retaining the highest credit rating.

The three did not attend meetings with the other two firms. A spokesman for the governor acknowledged the concerns about a bond rating hit from Moody’s.

As a part of the presentation to the agencies, officials highlighted actions taken this year on the budget as well as the creation of a committee to track the effects of federal cuts on Maryland.

Layoff notices spiked in February and March, but “normalized in April,” according to a copy of the presentation obtained by Maryland Matters. Monthly federal employment showed no declines; unemployment claims showed no increase.

But state officials also acknowledged the chance of a delayed effect, as pending federal lawsuits over Trump actions are resolved. Another potential effect could come from employees who took buyouts and may apply for unemployment in the fall.

Officials told all three bond-rating agencies that the state was seeing stronger than projected income tax withholding. While initial projections for fiscal 2025 called for 5.5% growth, income tax collections were up 9’% through March, the presentation said.

The joint Democratic statement said leaders 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.” their statement said. “Maryland’s creditworthiness has only been strengthened by our collective work on this budget.”

Fitch and Standard & Poors are expected to release their own ratings in advance of the June bond sale. Officials have not expressed a heightened concern for a downgrade from either of the remaining agencies.

By Bryan P. Sears

Amy Horne, the newly appointed Executive Director of the St. Michaels Community Center, brings deep personal and professional ties to Talbot County. A native of the area, Horne says she feels grateful to be “back home” and inspired by the chance to lead an organization with such an expansive mission. In a recent interview with The Spy, she described how the Center offers programming for children, adults, and seniors, including a weekly senior lunch and an active adult speaker series.

She highlighted the Center’s robust food distribution program as one of its most essential services. “We’re the only non-age-specific facility in Talbot County that offers all three food programs: hot congregate meals, delivered meals, and a pantry,” she said. With growing food insecurity even in one of the wealthiest counties in the country, Horne said she’s working to expand pantry hours and explore long-term funding solutions.

Looking ahead, Horne envisions workforce development initiatives and more youth programming, including a middle school dance this June. She’s also planning a strategic needs assessment for the Bay Hundred area. “A community center doesn’t tell people what they need—we ask,” she said. The Center celebrates its 35th anniversary this August.

This video is approximately five minutes in length. For more information about the St. Michaels Community Center and make a donation please go here.

Unofficial vote tallies tonight indicate that Don Abbatiello has won a decisive victory over incumbent Frank Gundallus with 2,207 votes over 976, with some 230 absentee ballots yet to be counted.

Easton Council President

Don Abbatiello: 2,207
Frank Gunsallus: 976

Ward 2

Robert Rankin: 493 votes
Lynn Keefe: 228 votes

Ward 4

Elmer Davis: 253 votes
Cameron Keefe: 128 votes
Moonyene Jackson-Amis: 103 votes

At its most recent meeting, the Easton Town Council introduced a text amendment to the town’s zoning ordinance that would revise the supplemental standards related to seafood processing operations, including possible odor control that impacts the community’s quality of life.

This action is procedural and marks the beginning of the formal review process. As required by both the Maryland Land Use Article and Easton’s zoning ordinance, the proposed amendment will now be referred to the Planning Commission for evaluation.

A public hearing on the amendment has been scheduled for June 2.

An attached video highlights the Town Council members’ responses and a sample of public comments regarding the proposed changes.

Council Discussion

This video is approximately five minutes in length.

Public Comment 

This video is approximately 15 minutes in length.

After an extensive search, the Town of Easton is excited to announce the hiring of Andrew “Andy” Kitzrow as our next Town Manager. Kitzrow takes this new role after serving as the Salisbury City Administrator since 2023, and as the Deputy City Administrator since 2017. As Easton Town Manager, he will be responsible for overseeing all town operations, acting as a leader to personnel, and serving as a key point of contact for the Mayor, town leadership, Town Council, and residents of Easton.

“Every new beginning comes from the courage to let go of the familiar,” said Kitzrow. “As I step into the role of Town Manager for Easton, I do so with great excitement for the opportunities that lie ahead.”

Kitzrow brings a wealth of experience and knowledge to the role, with 19 years served in local government, including seven years in executive leadership roles. After obtaining his bachelor’s degree at University of North Carolina at Chapel Hill in 2005, Kitzrow would begin a long career in community administration by serving as a Recreation Program Director, and later a Recreation Superintendent for Wicomico County before landing his role as Deputy City Administrator for the City of Salisbury in 2017.

In his roles as Deputy City Administrator and City Administrator for Salisbury, Kitzrow championed many successful projects and initiatives, including:

• The establishment of the Arts, Business, and Culture Department promotes tourism, revitalization, and economic growth.

• The introduction of THRIVE, an employee health and wellness plan designed to holistically improve the physical, mental, and emotional well-being of City staff.

• The launching of two youth community centers, which now serve hundreds of youths while fostering growth and community engagement.

• The recruitment of top talent in numerous critical roles throughout the organization, including Police Chief and Fire Chief.

• Overseeing teams that secured over $25 million in state and federal grants.

“This was an extensive process, because we wanted to get the right person for the job,” said Mayor Megan Cook. “We partnered with Sumter, a local government consulting firm, to assist us with the search for not just qualified, but really exceptional candidates. We received applicants from all around the country, and as luck would have it, found the best prospect right here on the Shore. We’re so excited to have Mr. Kitzrow’s leadership and expertise on our team here in Easton, and I am excited to work with him on helping our great town continue to thrive.”

The search for a new town manager began in August of 2024, with Easton Police Chief Alan Lowrey filling in as Acting Town Manager throughout the process. “Chief Lowrey stepped up for us in such a big way,” added Mayor Cook. “Our staff and our town have been so lucky to have his outstanding leadership over these last several months — I can’t overstate how important his time here has been for us during this transition.”

Kitzrow’s appointment was approved by the Town Council at their meeting on Monday, May 5, and he is scheduled to begin serving as Easton Town Manager on July 7.

In an unprecedented action yesterday afternoon, Town of Easton officials posted a special alert addressing false claims about the town’s budget transparency, ward boundaries, and housing policies on their website. The town office was compelled to respond to this misinformation resently sent to residents making misleading claims in the run-up to the May 6th election.

Here is the page in full.

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In the wake of the upcoming 2025 Easton General Election, we have become aware of misinformation spreading regarding the Town Office, the budget process, ward zones, and inclusionary housing. Below we address the false claims we have encountered, followed by factual explanations with dates, documents, and links to verify them.

FALSE CLAIM: The line by line budget is not available to the public.

The FY 26 budget draft is currently online and available to the public, and has been accessible on our homepage since April 17, 2025. Mayor Cook gave her full budget presentation at the live-streamed council meeting on April 21, where she announced how to access the files, and video of this presentation along with a direct link to the full line by line budget was posted to social media on April 23. Last year’s budget presentation was also livestreamed and publicly delivered, with the budget also available on the Town Website.

FALSE CLAIM: This is the first time in 30 years a budget has been reviewed line by line.

Each year budgets are thoroughly and painstakingly reviewed for several months ahead of the Mayor’s budget presentation. Articles are gone through line by line, and department by department numerous times before a budget is finally settled on to present.

Town leadership meets regularly with the Mayor and Town Manager to discuss budget items in detail, cutting and adjusting as necessary to achieve a balanced budget. Additionally, each department head takes part in a public budget workshop (which is also recorded and available on the website) in which council reviews their budget with them ahead of the final presentation.

Prior budget workshops (dating back to April of 2022) are still available to view on our Agendas & Minutes page.

FALSE CLAIM: The Town has concealed information about ward boundaries, and only recently made a ward map available.

The Town of Easton has had a ward map available on their website since August 2022, shortly after the creation of the current website interface.

Since then the ward maps have been shared on social media in advance of local elections to help residents. The “Eye Over Easton” interactive map has ward location features, and was released on February 16, 2023, hosted on the Town of Easton website. Eye Over Easton launched alongside a tutorial video, and its creation was promoted on social media and picked up by several local media outlets including The Talbot Spy, and a television segment on WBOC TV.

In an effort to make things even easier on residents, an Interactive Ward Map was created in advance of the 2025 General Election. This map bypasses all additional Eye Over Easton features and exists solely to identify the town’s ward boundaries. After receiving feedback from residents about ease of use, the Interactive Ward Map was quickly designed and expertly put together by our Planning and Zoning staff, and was made available on April 30, 2025.

Residents who are not active online or on social media are encouraged to come into our offices on 14 S. Harrison Street, or to call us at 410-822-2525 where we will be happy to assist anyone with locating which ward they are in, or to help them with any other issues we are capable of assisting them with. We have an excellent front office staff that are friendly and helpful to anyone who comes through our doors.

FALSE CLAIM: Ward Boundaries were gerrymandered in an attempt to influence elections.

By state law, voting wards must maintain a threshold of population variance below 10%. In 2022, the Town of Easton voted unanimously to approve Ordinance No. 792 which reestablished ward boundaries in Easton to maintain accordance with the law.

This ordinance was not passed in secret, with a public hearing held on Monday, December 19, 2022 at the Town Council Chambers. To notify the public, a public hearing notice was sent out to run in the Star Democrat, the local paper of record, in the Sunday, December 11, 2022 edition. Additionally, a public workshop was held on November 21, 2022 prior to the town council meeting. That meeting was also livestreamed and recorded and can be viewed here.

Ward zones have not been adjusted (other than land annexations) since this 2022 ordinance.

FALSE CLAIM: The Inclusionary Housing Ordinance requires high density housing in every Easton neighborhood, and will directly affect existing neighborhoods throughout Easton.

The discussed Inclusionary Housing Ordinance is currently in a draft stage, and has not been voted on or formally discussed in detail at a Town Council meeting. Further discussion is pending until the release of the Affordable Housing Task Force report, which is just one of several recommendations. The draft of the Inclusionary Housing Ordinance can be viewed here.

The current proposal posits that a developer producing new units designate 15% of their allotted units to be reserved for middle-income housing. These lower-cost units would not differ in appearance from the others, and would not detract from the visual element of the design.

As an incentive, upon agreeing to include these allotted lower cost units, a developer may utilize a 20% density increase to offset the cost of the lower priced units. Provisions are in the state statutes that enable local jurisdictions to approve inclusionary zoning legislation as well as density bonus incentives.

Even as a draft, this bill only affects new developments with seven or more residential units or the redevelopment of properties that produce seven or more residential units. Because less than seven units would be a fraction, developers of six or less new units would simply pay a fee. It does not affect any existing planned unit developments, and has been introduced largely to provide workforce housing to people who work in Easton, including police officers, firefighters, and teachers.

Town of Easton offices are transparent about our policies and procedures, and should be used as a resource for the public. For more information about the Town of Easton, please visit our website at eastonmd.gov, please visit us on our social media channels on Facebook, Instagram, Twitter, and YouTube, give us a call (during business hours) at 410-822-2525, or come in to our offices at 14 S. Harrison Street.

The town’s ongoing efforts at openness. Residents can visit eastonmd.gov or Town Hall for assistance and information.

The Spy-Avalon Town Hall meeting last night was a full house, and that only means good things for the Easton Town Council election next week. With all seven candidates in attendance, the Spy’s Craig Fuller moderated a two-hour discussion about the town’s most pressing issues and vision for the future.

This video is approximately 2 hours in length.

The Talbot Spy continues its tradition of candidate profiles for those running for Town Council President, as well as Ward 2 and Ward 4 seats. Six out of the seven candidates accepted the Spy’s invitation for a long-form interview about their background, motivation for running, and priorities if elected. One candidate, Frank Gunsallus, the current council president, did not respond to our several requests for his participation. While we regret his absence, he did agree to a similar profile in 2023 for the same office, so we have included that interview here.

The Spy and the Avalon Foundation will also continue their tradition of hosting an election town hall meeting, featuring the Spy’s Craig Fuller, on April 29th at 6 pm at the Avalon, where all seven candidates have agreed to participate. This is a free event.

The Town of Easton’s general election will be May 6th and will take place at the Easton Volunteer Fire Department 15 Leonard Rieck Drive, Easton, MD 21601

Town of Easton Council President 

Frank Gunsallus (2023)

Ward 2

Lynn Keefe

Robert Rankin

Ward 4

Elmer Davis

Moonyene Jackson-Amis

Cameron Keefe

 

 

As noted in the Talbot Spy’s interview with Mayor Megan Cook and Ward 3 Councilmember David Montgomery last week, the Town of Easton’s Council members began a conversation about the need and importance of establishing formal guidelines for financial reporting and limits on campaign contributions for individuals and organizations within the municipality.

During the public comment period, some residents raised questions about the timing of the proposal, before the town election on May 6th, as well as concerns that this legislation might be redundant or in conflict with other state reporting laws. Other public comments suggested that the proposed change of local law would ensure transparency and follow other communities in Maryland that have elected to have ordinances despite the existence of state reporting requirements.

The Council agreed to hold a workshop on the proposal next month.

This video is approximately 13 minutes in length.