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Does Hogan deserve credit for state's AAA bond rating?

This month Maryland retained the stellar AAA bond rating from Moody's that it has held since 1970. Should Gov. Larry Hogan get the credit?

Hogan thinks so. On Feb. 19, the governor hailed the reaffirmation of the top rating for creditworthiness on his Larry Hogan and Change Maryland Facebook pages.

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"I am very proud to announce that thanks to the steps our administration has taken to balance our budget and restore our economy, Maryland has retained its AAA bond rating," Hogan said.

Along with that statement was a quote in large type attributed to Moody's: "Maryland [has] been appropriately addressing its structural budget gap & pension funding concerns, even under pressure from federal budget reductions."

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The full sentence reads: "Consistent with its history of strong financial management, the state has been appropriately addressing its structural budget gap and pension funding concerns even under pressure from federal budget reductions."

In the first clause of that sentence, Moody's analysts give the state high marks over time for its "financial practices and flexibility."

The report mentions Hogan's budget proposal in a favorable light but does not portray his actions as the sole reason Maryland retained the rating. It describes his plan for $766 million in "spending actions" to eliminate the state's long-term revenue shortfall next year.

However, it also points to another $460 million in cuts and transfers made by the Board of Public Works in January, when Democrat Martin O'Malley was governor. The report also cites pension reforms enacted by the General Assembly under O'Malley.

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Moody's spokesman David Jacobson said the report was a general assessment of Maryland's condition rather than a comment on any one administration's actions.

He said Moody's had been asked to review the state's AAA rating before the planned sale of $1.3 billion in state bonds next month.

One person who took umbrage at Hogan's claim of credit was House Speaker Michael E. Busch, who noted that Maryland has retained its AAA rating through administrations of both parties.

When you "exaggerate or inflate" claims, the Anne Arundel County Democrat said, "you lose the substantive argument and credibility."

"I don't think there's anyone out there that believes the reason we have a Triple-A bond rating is because he got elected," Busch said.

Hogan spokesman Doug Mayer did not respond to a question of whether the governor is claiming sole credit. But he said the ratings agencies give strong weight to the current governor's policies.

"In conversations with the administration, the rating agencies provided only positive feedback on the governor's plans for a structurally balanced budget which delivers on commitments to bond holders over the long term," Mayer said.

—Michael Dresser

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