WASHINGTON – Maryland’s local governments have been put on notice: One of the country’s leading source of credit appraisals is worried these counties won’t be able to balance their budgets following a change in the state cuts in education aid, and could downgrade their ratings.
When the Maryland General Assembly failed to agree on a revenue package, it triggered a so-called “Doomsday Budget” that cuts state spending by $512 million. This puts pressure on local governments, which now have to balance budgets by the end of May. The added pressure has Moody’s Investors Service considering a downgrade for individual county credit ratings.
Montgomery County Council President Roger Berliner says a drop in the Moody’s top rating of AAA would put an added burden on government, or trickle down to taxpayer eventually.
“It will increase our cost of doing business,” said Montgomery County Council President Roger Berliner of a potential AAA bond rating drop. “So we’ll do less, or we’ll ask people to do more.”
“We don’t contemplate either exceeding our charter limit on taxes or increasing taxes at this juncture,” Berliner said. “We will hold the line” against a tax increase.
The news from Moody’s’ “Weekly Credit Outlook” prompted State Treasurer Nancy Kopp to consult Gov. Martin O’Malley.
“The longer we go without a final conclusion in terms of deciding whether there will be a special session or not, the more concern it raises,” Kopp told the Associated Press.
O’Malley has said he would call House and Senate leaders and state lawmakers together for a special session, but only when he sees a chance for compromise. The Washington Post reported Wednesday that Senate President Thomas “Mike” Miller wrote a letter to fellow senators accusing House members of pulling “press stunts” rather than working toward an agreement before the end of the Maryland legislative session on April 9.
Montgomery County Councilmember Craig Rice says there’s plenty of blame to go around, including Senate President Mike Miller, House Speaker Mike Busch and Gov. O’Malley.
“You know, we continue to talk about ‘One Maryland,'” says Rice. “But I think what happened in this session, we saw a fragmentation, and that was not moving Maryland forward.”