And the crises keep on coming.
A $3 billion state budget shortfall and ensuing debate over new taxes and cuts to fix it. The loss of the Washington Commanders back to D.C. and the potential loss of a planned new FBI headquarters in Prince George’s County. A flooding disaster in Western Maryland just last week, and the daily barrage of hits coming from President Donald Trump’s administration.
The drop in one of Maryland’s top-tier credit ratings Tuesday was the latest blow, though it wasn’t entirely surprising to observers who have been warning about the state’s lagging economic performance for years and about the new threats from Washington, D.C. for months. The fiscal impact of the ratings change — in the form of potentially higher borrowing costs — may also be relatively minimal, experts say.
But the announcement was the latest in a series of challenges — both in governing the state and in maintaining two years of political goodwill — confronting Moore before another election right around the corner.
“The optics don’t look good for the governor,” said Daraius Irani, an economist who is the vice president of strategic partnerships and applied research at Towson University. “You could argue it’s his fault or it’s not his fault. But the problem is he’s kind of the guy holding the bag when it went down.”
Irani said Maryland had “laid the groundwork” itself for the ratings firm Moody’s to downgrade it from a Aaa bond rating to Aa1 for the first time in decades. The “last straw” that pushed it over the edge, though, was the impact from President Donald Trump’s administration, he said.
“Had everything remained the same … we probably would not have gotten [the downgrade],” Irani said.
Calling for Cutbacks
Moody’s, in its own explanation, pointed to “economic and financial underperformance” and the state’s “heightened vulnerability to shifting federal policies and employment.”
Republicans and other critics of the Democratic leadership in Annapolis have blamed the downgrade on Moore and what they call years of overspending and a resistance to cost-cutting. Moore and his allies have called it a “Trump downgrade” that happened despite their work this year to strengthen the state’s creditworthiness.
“It’s very disappointing. Not unexpected, but very disappointing,” said Maryland Chamber of Commerce President Mary Kane, who has applauded Moore’s mission to boost economic growth, while also raising concerns about his support for taxes impacting businesses.
After attending a press conference Thursday and getting a shoutout from Moore as he announced McDonald’s was hiring nearly 4,000 workers at its locations across the state, Kane said she agreed the Trump administration “is not helping at all” with Maryland’s economic issues. But leaders in Annapolis also missed an opportunity to make more meaningful cuts this session, she said.
“We’d like to see them cut back on a lot of spending and not balance the budget on the backs of Maryland businesses,” Kane said.
Biggest Challenges of His Tenure
Moore entered the 2025 legislative session in January facing the most formidable challenges since he entered office two years earlier — and as some supporters began to more frequently lift him up as a potential 2028 presidential contender.
The following 90 days were rocky, featuring more vocal opposition from legislative Republicans, a daily barrage of unpredicted hits from Washington and an anonymous “No Moore” digital campaign that all but kicked off the 2026 gubernatorial election.
The Democratic governor proposed filling the biggest budget hole in years with a combination of spending cuts and tax reforms. The final package raised taxes on the wealthiest earners, provided a modest tax cut to the middle and lower classes, imposed a new sales tax on technology services and raised a variety of other fees.
Republican officials and the business community railed against the $1.6 billion tax package, which they have called the largest tax increase in state history.
But Moore and other Democrats’ decision to structure it in the way they did — without larger income tax increases, property tax increases or broad increases to the 6 percent sales tax — was likely the “politically safe way to play it,” said Kris-Stella Trump, a political science professor at Johns Hopkins University who studies public attitudes toward taxes.
Taxes targeting the rich are widely popular among Democrats and many Republican constituencies are “often ambivalent about it,” she said. The modest tax cut that is expected to be worth an average of about $50, meanwhile, is most valuable as a political message so that the governor can say he provided a tax cut even if it wasn’t very substantial, Trump said.
“There is vast political machinery around trying to bring these messages to people and highlighting it to them,” Trump said, referring to both sides of the narrative. “Any politician would be aware of what messaging they make possible for their opponents if they impose this tax or that tax.”
That machinery has shown itself more as 2026 inches closer — from each of the last two Republican governors criticizing the current leadership in the wake of the ratings downgrade, to Moore’s own political operation soliciting donations from what he considers his wins.
“Governor Wes Moore refused to kick the can down the road,” Moore’s campaign team wrote in a fundraising email to supporters last month. “He faced crisis with courage, got a budget passed that invests in the future of our state, and 94 percent of Marylanders will either get a tax cut or see no change in their income taxes. If that’s all you need to hear, will you pitch in $10 today to continue our fight for Maryland to thrive?”
Pushing Back Against Critics
Moore has pushed back on both the criticisms from his opponents and on the Moody’s decision, which was followed by another one of the three ratings agencies keeping Maryland’s AAA rating. Moody’s also downgraded the federal government’s rating from Aaa to Aa1 on Friday.
Moore said at a press conference Thursday that his administration had “disagreements with some of the methodology,” though he didn’t say what those disagreements were specifically.
Helen Grady, the governor’s budget secretary, said in an interview the administration made its case to Moody’s representatives and ultimately viewed the decision as premature because it was based on anticipated impacts of federal changes that are speculative. Revenue from income tax withholdings, for example, have been running stronger than expected so far this year, she said. And federal layoffs, though still in flux, have not yet hit the levels that the state budgeted for, she said.
“Our view is that we presented a pretty tight case that any rating action on the basis of impacts from the federal government, in our view, is speculative,” Grady said. “At this point, we were able to show them that we are not yet seeing impacts in our key economic metrics or in state revenues.”
Still, Moore also said at the press conference that part of Moody’s analysis — which even before this week had indicated Maryland is the most vulnerable state to Trump’s budget cuts and firing of federal workers — reflects his own vision.
“It’s the reason that we’ve had such a push on making sure we’re emphasizing economic growth. It’s the reason we’ve had a push on ensuring that we are diversifying our economy off of Washington, D.C.,” Moore said.
That plan is easier said than done, experts say.
“That’s a big challenge,” Irani said of the idea of weaning off the federal government, which employs about 10% of the state’s population, provides about a third of the revenue in the state budget, and supports key economic pillars like medical research and technology. “It’s something that can’t be done in three months. It’s going to take a couple years to get started and also to see some traction.”
Irani said it was important that Moore had identified what he calls “lighthouse industries” to focus state investments. Those areas of focus include life sciences, information technology and quantum computing.
Targeted spending in those areas could help spur further innovation and economic growth. But it’s a longer-term approach, with effects that might not be evident until years later, Irani said.
“That’s going to be an ongoing challenge for the governor,” Irani said.
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