S&P Revises Maryland Credit Outlook To Negative, Citing Budget Pressures

ANNAPOLIS, Md. — S&P Global Ratings revised its outlook on Maryland’s outstanding debt to negative from stable, citing growing budget pressures and concerns over whether the state can return to long-term structural balance.

The rating action was announced May 21, 2026. S&P also assigned its AAA long-term rating to Maryland’s $800 million tax-exempt general obligation bonds, state and local facilities loan, first series 2026.

At the same time, S&P affirmed its AAA long-term rating on Maryland’s outstanding general obligation debt. The rating agency also affirmed several related ratings, including AA+ ratings on Maryland Department of Health lease revenue bonds, Maryland Department of Transportation county transportation revenue bonds and other state obligations supported by lease payments subject to appropriation.

S&P also affirmed AA ratings on Maryland Stadium Authority revenue bonds tied to the Built to Learn program and several stadium and project-related bond issues, including football stadium, baseball stadium, minor league baseball, Hagerstown and Pimlico improvements projects.

The outlook on Maryland’s applicable S&P ratings is now negative.

The S&P action comes about a year after Moody’s Ratings downgraded Maryland’s long-standing top bond rating to Aa1, ending a more than 50-year streak of the highest credit rating from that agency. Maryland officials recently ended the state’s relationship with Moody’s as one of its rating firms, while S&P, Fitch and KBRA have continued to rate the state at AAA.

The Maryland Republican Party criticized the outlook revision, arguing it is another warning sign for the state’s finances.

“Maryland may soon lose its AAA bond rating with another major rating agency,” the party stated. “S&P Global has downgraded our state’s financial outlook from ‘stable’ to ‘negative,’ and may downgrade our bond rating ‘if the state shows a lack of willingness to make necessary and timely enduring adjustments to return to sustainable budgetary balance.’”

S&P stated the negative outlook reflects an increasing likelihood the state’s rating could be lowered if Maryland does not make timely and lasting adjustments to address budgetary risks, maintain adequate cash reserves and return to sustainable budget balance.

The agency indicated it could lower Maryland’s rating if the state shows a lack of willingness to make necessary adjustments or if wealth, income, employment and population levels show persistent unfavorable trends, particularly amid uncertainty in the government sector.

S&P also stated the outlook could return to stable if Maryland makes timely adjustments that address economic and budget risks and restore sustainable balance while maintaining adequate reserves.

The report noted that environmental, social and governance factors did not materially influence the credit analysis. Although Maryland faces physical risks from rising sea levels along the Atlantic Ocean and Chesapeake Bay, S&P stated those risks are addressed through active watershed management, runoff efforts, resilience funding and legislation aimed at reducing greenhouse gas emissions.

The action does not remove Maryland’s AAA rating from S&P, but the negative outlook signals increased pressure on the state’s top-tier credit status if budget challenges continue.

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