Toll reductions announced last week for bridges and tunnels across Maryland are a "credit negative" for the Maryland Transportation Authority, according to an analysis by Moody's Investors Service.
The move to cut rates, made at the urging of Gov. Larry Hogan, also "signifies the state's departure from non-intervention in toll rate setting," concluded Jennifer M. Chang, an analyst at the prominent bond rating agency.
However, because the cuts only offset "a fraction" of a toll increase in 2013 under the administration of former Gov. Martin O'Malley, Moody's does not expect they will have a "significant negative effect on the authority," Chang wrote.
The MdTA maintains an Aa3 stable rating. The report was issued Monday.
Erin Montgomery, a Hogan spokeswoman, questioned the findings on Tuesday.
"The fact is, the previous administration intervened repeatedly on toll rates, dramatically increasing them in both 2011 and 2013," she said in a statement. "Governor Hogan made a promise to Marylanders that he would cut burdensome taxes and tolls, and that is exactly what he did last week, delivering $270 million in toll relief" over five years.
The MdTA board is supposed to act independently, and legislators have criticized Hogan for pushing though his desired toll reductions with little public awareness. O'Malley also was criticized for pushing through the two toll increases that went into effect during his tenure, though there were public hearings on those proposals before they were approved.
MdTA board members, who set policy for the independent agency, are appointed by the governor, and the state's transportation secretary — now Pete Rahn — serves as board chair. Other than Rahn, Hogan has only appointed one board member since taking office.
Hogan had campaigned against increased taxes and tolls implemented under O'Malley and pushed for tax reductions during the recent session in Annapolis, as well, though several of his efforts were stymied by the General Assembly.
After the MdTA's board approved the toll reductions Thursday, Hogan called them "by far our largest tax relief package to date."
The toll reductions will cut the cash fee for drivers crossing the Chesapeake Bay Bridge from $6 to $4, eliminate the monthly fee for lightly used E-ZPass transponders held by state residents, and cut costs for E-ZPass users at facilities across the state, from the Bay Bridge to the tunnels and bridges around Baltimore. Most of the toll reductions go into effect July 1.
They will reduce the MdTA's annual revenue by $54 million. Chang found MdTA projections show toll revenues for 2016 through 2020 falling 4.5 percent below the $653 million in revenues that had been forecast for fiscal 2015.
Critics of the reductions, including General Assembly leaders, said they were not properly discussed in Annapolis and would threaten capital projects, including the replacement of the Governor Harry W. Nice Memorial Bridge.
On Tuesday, Sen. Richard S. Madaleno, Jr., a Montgomery County Democrat who is vice chairman of the Senate Budget and Taxation Committee, called the Moody's report "troubling."
"It's a sign of how secretive the administration was in moving this plan ahead," Madaleno said. "They didn't want to risk any comment, any objection or probably any review of what it would mean."