Md. Governor Reacts To Debt Crisis

ANNAPOLIS, Md. (WJZ) — Maryland’s economy is closely tied to the federal government.  With billions of federal dollars spent here each year, cuts in federal spending are cause for concern. 

Political reporter Pat Warren has reaction from the governor.

Maryland isn’t likely to feel it yet, but the extended outlook is not good.

Tidal wave or ripple effect?  The impact of the US credit downgrade will be felt in Maryland…but to what degree and for how long?

“What Marylanders need to know about our bond rating is that we have a AAA bond rating,” said Governor Martin O’Malley.

What Maryland also has is an economy tied more closely to the federal government than other states, which means ratings agencies could put it on a credit watch.  Maryland has held a AAA rating for years, but it also depends on federal spending.  In fiscal year 2009, for example, 52.4 billion federal dollars were spent here.  An analysis from Trend Advisors shows that a 22 percent cut in spending here would equal a loss of 150,000 jobs.

Governor O’Malley is aware of the stakes.

“We’ve made the tough decisions time and again.  None of them individually have been popular, whether they were cuts or whether they were things like the penny in the sales tax, but we made the tough decisions so we can pay our bills and maintain a AAA bond rating,” he said.

Morris Segall, president of Trend Advisors, says it could be tough for the state to hold that line.

“We’re running a structural deficit of a billion dollars even before this, so to the extent that we had our own difficulties without this, I think those difficulties became a lot more magnified with this,” Segall said.

This is uncharted territory.  One thing we as consumers might notice is higher prices on imported goods since the value of the dollar is down.  Interest rates are not expected to spike but they could be creeping up.

Maryland achieved its rating 10 days ago and doesn’t go back into the bond market until February.

More from Pat Warren
Comments

One Comment

  1. Wheres common sense when you need it says:

    I posted a comment but it doesn’t show up. Way to go, nothing like getting the peoples voice out there for the world to read!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    1. Get With the Program says:

      This site uses a filter that blocks a percentage of comments. It is programmed to look for posts in “All Caps” since those folks rarely address the topic at hand, and are focused upon themselves.

  2. Julia says:

    Yeah,O’Malley and giving money to illegals instead of helping out legal citizens of your own state is probably one of the things you should “Cut back on”

    1. Dave says:

      Amen. He actually took away State Grants promised to Maryland students as soon as that terrible in state tuition bill passed. Maybe he should spend more time Governing and less time playing in a band. On second thought when he is busy playing in the band he isn’t signing bad legislation into law. Rock on Gov!

  3. JackDaniels says:

    IF THE AMOUNT OF FEDERAL MONEY SPENT HERE DECREASES, OWE-MALLEY CAN JUST RAISE THE TOLLS AGAIN OR ADD SOME OTHER FEE……………LIKE, $500 STATE TAX RETURN FILING FEE…………..THAT WILL MAKE UP FOR LOST REVENUE!!!!!!!

  4. TaxAndSpendYourMoney says:

    Tax O’Malley needs to be quiet and talk about things he knows about. Like Fee-Keeping… buzz off governor moron.

  5. Bottom Line says:

    Since MD has been maintaining a debt of 1 Billion $, our budget is being handled as wrecklessly as the federal government. One of the primary duties of a leader is to manage tax revenue effectively; to maintain a balanced budget. Since this clearly is not the case, I would suggest that we disregard any precursery comments from O”Malley that are intended to soften the blow. The bottom line is that we are in bed with the federal government, and will respond in a similar fashion, regarding cut-backs. I do expect additional tax hikes and increased fees across MD, as O”Malley is a creature of habit, just like many other theives.

  6. O-Faily says:

    MD Governor reacts to debt crisis, “Derrrrrrr…….”

Leave a Reply

Fill in your details below or click an icon to log in:

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

More From CBS Baltimore

Track Weather On The Go With Our App!
Your Podcast Network Play.it

Listen Live