State Keeps Its AAA Bond Rating, But Firms Warn Of Federal Cuts, Pension Debt

The governor and state treasurer cheered Maryland’s retention of its AAA bond ratings released Friday, and the three New York rating agencies continued their praise of Maryland’s high incomes, diversified economy and strong fiscal management.

But the agencies, which have given their top ratings to Maryland for decades, also sounded what have become routine warnings about the state’s dependence on federal spending in an era of cutbacks and sequestration. They continued to worry about the state’s high pension liabilities, particularly compared to the other eight states that also get AAA ratings.

The rating firms balance that by noting state officials are keeping a close eye on federal reductions, and pension reforms are projected to restore funding for the retirement system over the next decade.
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