Delegate Kathleen Dumais

Democrat, Maryland House of Delegates District 15

Maryland Retains Triple-A Bond Rating

From the office of Speaker Mike Busch, July 15, 2010

On Wednesday, Fitch Ratings, Standard & Poor’s and Moody’s rating agencies all affirmed Maryland’s top bond rating status. Maryland is one of only eight states in the country to have a triple-A bond rating.

Rating Agencies Highlight “Conservative Financial Operations” and “Strong Management Practices”

All three rating agencies gave Maryland a stable outlook. Here are highlights from each agency’s report:

• S&P believes that Maryland has “proactively responded to the recent structural budget imbalance and we would expect continued focus on achieving structural budget balance… We believe the recession will continue to affect Maryland’s economy but to a less extent in 2010.”

• S&P also gives Maryland a “strong” financial management assessment because financial “practices are strong, well embedded and likely sustainable.”

• Fitch highlighted that: “financial operations are conservative, and the state continues to demonstrate a commitment to maintaining budgetary balance.” Moreover, “the state’s strong debt management remains a credit strength.”

• Moody’s noted that “the highest quality rating reflects Maryland’s strong financial management policies and economy” and the State’s “history of proactive financial management”. Moody’s went further in noting “Maryland’s historically conservative financial management and aggressive approach to dealing with budget shortfalls.”

Unemployment Rate Continues to Improve

• Since February, Maryland has added 38,000 jobs – twice the rate of the national average. Of that, , the private sector has added 20,100 jobs

• Maryland’s unemployment rate is about 25 percent below the national average, at 7.2% in May 2010.

• The Daily Record reports that “Overall, 37 states posted lower unemployment rates in May. But Maryland was one of 13 states whose month-to-month drop was statistically significant, meaning it was unlikely to have occurred just by chance.”

FY10 Year End Projections

• DLS had originally projected revenues for last fiscal year to decline 5%. Revenues are performing better, however, with a decline of 2.8% from FY09 levels.

• If this trend continues through the year end closeout, the State will have an additional $200M surplus for last fiscal year, on top of the nearly $830M in cash reserves left by the legislature. This will enable Maryland to cover the Medicaid costs, since an additional Medicaid stimulus bill for states has not passed Congress.

• The total FY11 budget spends 2% less than FY10. Overall, the General Fund budget has decreased by 3% over the past four years.

Progress, Despite the Global Recession

This term, the legislature, working with the O’Malley Administration:

Protecting K-12 education by fully funding our classrooms, totaling $5.7 billion for FY11. Maryland ranks #1 for a second year in a row in the country, according to Education Week magazine, and, more recently, Newsweek ranked Maryland high schools top in the country for the number of students taking college-level courses.

Modernizing classrooms by funding $1.3 billion in school construction across the State. This is double the funding during the last four years, which totaled $622.7M in funding for statewide school construction in four years.

Froze college tuition for four straight years, followed by a 3% cap for Maryland universities next school year. Tuition rates for public universities have fallen from 6th highest in the country to 17th over four years, and are projected to fall to 21st in FY11.

• Achieved the lowest violent crime levels since 1975 across the State. New criminal laws to crackdown on gang activity and sex offenders have given law enforcement new tools to keep our communities safe.

Extended healthcare coverage to over 175,000 of our neighbors, including 86,000 Maryland children, while other states are kicking people off the healthcare rolls. Maryland is now 16th in the nation for providing healthcare coverage to adults, down from 44th in the nation in 2007.

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