by Dick Hall-Sizemore
Governor Youngkin has proposed tax reductions that would reduce state revenue by about $1 billion in this biennium.
I have an alternative proposal on how to use that billion dollars, one that should appeal to the instincts of conservatives on this blog—reduce the Commonwealth’s outstanding debt balance.
The Debt Capacity Advisory Committee has reported that, as of June 30, 2022, the Commonwealth had a balance of $4.0 billion in authorized but unissued tax-supported debt. Using the $1 billion in general fund revenue that Youngkin proposes to forego in the form of tax reductions to supplant bond authorizations for capital projects instead would save the Commonwealth a significant amount in interest payments over the course of the term for which those bonds are now authorized. I do not have all the data needed to project the savings, but it could easily be several hundred million dollars over the course of 20 years.
Financial advisors often urge individuals to pay down debt balances whenever possible. It seems that would be a prudent move for the state as well.