Another Idol Has Fallen: Virginia's Fiscal Condition Not So Great

Virginia state finances -- not the gold standard we thought.
Virginia state finances — not the gold standard we thought.

by James A. Bacon

Once upon a time, Virginia was widely regarded as the Best State to Do Business. No longer. That reality is slowly making an impression in government and economic development circles, and I sense a growing awareness that Virginia can’t continue doing things the same way it always has.

Virginia also has long enjoyed a reputation for fiscal rectitude, due mainly to its AAA bond rating, the maintenance of which is a bipartisan priority. However, Virginia’s fiscal solvency is slipping, too — and the problem runs deeper than temporary problems caused by cutbacks in federal spending. I don’t get the sense that this reality is yet sinking in.

In research for George Mason University’s Mercatus Institute, “Ranking the States by Fiscal Condition,” Eileen Norcross rates the financial health of U.S. states in FY 2013 based on short-and long-term criteria. Virginia ranks only 21st on the list, lagging Alabama and South Carolina, among other states. (For those on Boomergeddon watch, the states with the most precarious finances are New York, Connecticut, Massachusetts, New Jersey and, of course, the U.S. poster boy for fiscal irresponsibility, Illinois.)

The key insight here is that balancing the budget is only one measure of fiscal health. “State spending may be large relative to the economy and thus be a drain on resources,” writes Norcross. Also, she adds, “The state may define budgetary balance to exclude certain funds or to mask debts, thus obscuring the true cost of spending or the resources required to finance long-term obligations.”

The report compiles five measures of financial strength:

Cash solvency. Can the government pay bills that are due over a 30- to 60-day horizon? On average, the states have a ratio of cash to short-term liabilities of 2.3 to one. Virginia ranks 30th most solvent by this measure.

Budget solvency. Can the state government meet its fiscal year obligations? In other words, are revenues running ahead of spending? Virginia’s capacity by this measure ranked 29th nationally.

Long-Run solvency. This ratio represents the proportion of long-term liabilities — bonds, outstanding loans, claims and judgments, compensated employee absences — relative to total assets. Virginia ranks 27th by this measure.

Service-level solvency. This measure captures how much “fiscal slack” states have by measuring the size of taxes, expenses and revenues relative to state personal income. It is a general measure of whether a government  has room to raise taxes or increase spending. Virginia ranks 5th — the only measure it which it stands out as being in solid shape.

Trust fund solvency. The final measure factors in long-term obligations such as long-term debt, pension obligations and other post-employment obligations (such as health insurance for retirees). Virginia ranks 15th by this measure.

(Hat tip: Tim Wise)

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  1. Cville Resident Avatar
    Cville Resident

    Eh…I’m a little skeptical about “Cash Solvency” as a component of the ranking. 2.3 to 1 is fine for gov’t. I’d say a 2 to 1 ratio or greater is fine for gov’t. I’m not sure any auditing firm would bat an eye at a gov’t with a 2 to 1 or greater ratio for gov’t. Not sure there’s a lot of sense in “ranking” states 1 to 50 in that category. To me, it would make more sense to have it as “satisfactory” or “unsatisfactory” rather than a 1-50 ranking. But we all know that “listicles” draw attention.

    And I’ll play my usual broken record function…..Is this ranking (and the “best business” ranking) about what the Urban Crescent is doing? Or is it just another indicator that the rural horseshoe (the equivalent of Mississippi or West Virginia per Baliles’ numbers) is killing the state?

    I still think most people aren’t properly analyzing the situation. Everyone’s obsessed with sequestration (NoVa and HR). Again, there are already signs emerging that both regions are starting the long comeback trail. I contend that it’s the absolute basketcase that is the rural horseshoe that can’t be covered up any longer that’s now hurting Virginia in these rankings. NoVa and HR were on fire for so long (2001-2011) that their outsized performances covered up the disaster of rural Virginia.

  2. Steve Haner Avatar
    Steve Haner

    Wake me up when the AAA ranking is in jeopardy. That remains a gold standard measure and as I recall only a handful of states enjoy it. Five different measures for cash solvency and debt ratios to not fully define the state’s fiscal condition.

    That said, Cville has some excellent points about the stability (vs. previous rapid growth) in the urban crescent allowing the weakness outside that crescent to show through.

  3. LarrytheG Avatar

    anyone know how the Mercatus criteria match up or not with the rating agencies criteria that yields the AAA rating?

    Hey.. for that matter – maybe Mercatus did list and match their ranking – along with the credit ratings? Would the Mercatus list align with credit ratings?

  4. Darrell Avatar

    The only thing on fire in HR during the last run up were real estate taxes. Most of the rest, (education, etc.) were just like RoVa. Gifts from NoVa. That Crescent business, at least down in Tidewater, is an optical illusion.

    1. LarrytheG Avatar

      Darrell – I thought you guys built air craft carriers and sub and stuff down your way, no?

      1. Darrell Avatar

        Sure we do, and when it’s done the workers go home.

        “Layoffs possible at Newport News Shipbuilding” VP 7/10/2015

        Haven’t you ever read the JLARC and other reports on fiscal stress for this area? Haven’t you heard about how taxpayers are put on the hook for developer dreams down here? Or how a top end job in these parts is retail sales? You didn’t really think all that shipbuilding money stays in Tidewater, did you? Does Norfolk Southern’s? This place is RoVa with some jobs.

        1. LarrytheG Avatar

          I thought you guys always had more boats in the pipeline.


          and you guys have air bases and seal bases also.. right?

          and a ton of container ships..

          I’d say it sure seems like ya’ll are a LOT better off than most of ROVA.

          1. LarrytheG Avatar

            can’t disagree… many in much worse condition but 12, 14, 15 is pretty bad also.

            amazing… you guys HAVE jobs… but you must also have a pile of others not working also, eh?

  5. TooManyTaxes Avatar

    Fairfax County is quite concerned that it will lose its AAA rating after recent warnings, a loss of Uncle Sam’s contracting dollars, growth in good-paying jobs and a major change in demographics. Even though, there is generally public silence among officials, they are worried.

    Yet, the County still tries to be all things to all people. It needs to identify and focus on key issues; fund what works; bring county employee compensation and retirement costs into line; and, like McAuliffe, worry about attracting and growing business.

    1. LarrytheG Avatar

      I know – folks here think I have no life.. and they might be right.. though I still love to canoe and hike.. when I’m not being obnoxious here in BR!

      So I actually tune in and listen to our BOS meetings.. Not only that – I read the agenda prior to the meeting.. and I’ll even go back to the archived videos !

      so every 6 months or so they have Davenport and Company come brief them on their credit rating…and what their prospects are to achieve that lofty AAA goal.

      And others can correct me if they think I heard it wrong but what I heard was a primary criteria was the capacity of the tax base and the willingness of the BOS to tap that revenue source to buy stuff on credit and pay it back…

      the shallower the revenue sources and the more circumspect the BOS is about debt – the more it dings a potential AAA rating…

      okay – so you guys come back and correct my impression…

      1. TooManyTaxes Avatar

        Larry, it’s my understanding that the main concerns the rating agencies have about Fairfax County, including FCPS and the Economic Development Agency (which issues revenue bonds) are: unfunded pension liabilities (both county run and its share of VRS); history of using one-time funds for recurring expenses; and a generally lower level of reserve funds. The size of debt has not been a concern since the BoS continues to limit the amounts of debt sold.

        Other concerns must include: sequestration and cutbacks in government contracting; a weak commercial real estate market; Silver Line debt; a changing demographic with more low-income residents and families moving to the county and often requiring more and expensive county and school services; and flat-lined job growth at the higher ends of the compensation scale.

        1. LarrytheG Avatar

          TMT – Davenport at the last briefing said that accounting standards are now addressing local level finances… and that it will become a part of the rating criteria.

          but I also think the perception of unfunded liabilities is largely misunderstood.

          It’s not that if you go negative that you go broke… it’s that you would fail to pay the full benefits. So instead of $500 you might get $492. It’s not a good thing but it’s a long way from a locality going into default on an owed debt payment and creditors taking action to seize assets.

          and with VRS – it’s a State Pension so what exactly is the consequence at the county level ?

          but .. overall – it’s not how much debt you have – it’s also how much revenue you have or can get… to pay it… and large diverse local economies provide a lot more flexibility than small , relatively poor counties with shallow sources of new revenues.

          1. TooManyTaxes Avatar

            VRS, as I understand it, funds state employees from state funds and bills local participants (such FCPS ), who pay from local taxes. VRS has considerable unfunded liabilities.

            And, indeed, you are correct. An unfunded pension liability means people get less than promised and generally not nothing.

            I think rural areas in Virginia (and elsewhere) need to look at consolidation with their neighbors.

          2. LarrytheG Avatar

            but TMT – if Fairfax is not actually paying the pensions – why are they being judged with regard to unfunded liabilities?

            If an retired Fairfax teacher does not get his/her pension – it’s the State that will be punished…

            I’m just not understanding how it affects Fairfax credit rating.

            on Consolidation – more than just rural… and it should include all counties for roads.

            If Fairfax had to be solely responsible for the roads around Tysons what would happen? Why should taxpayers of Va pay for Tysons roads?

          3. First, tax payers of Virginal are not contributing one penny to the Tyson’s Corner development. In Nova there developers build or pay for roads in and around a development as a part of getting the zoning they want.
            In addition every property owner in Nova pays a “Congestion Tax” when they buy or sell a property (home business etc.)…a part of former Gov. McDonnell’s “Rube Goldberg” transportation tax scheme.
            And Virginia’s problem with the VRS goes back to Governor Gilmore who wanted to stop paying the regular matching amount into the fund iin about 2000 (when he made his announcement) because he thought that if the Commonwealth invested right in the stock market it could earn enough to not to have to contribute to the retirement fund. In 1928 they called that “Betting on the stock market” and we know how that turned out.

          4. LarrytheG Avatar

            re: Tysons and taxpayers…

            I was looking at this:

            Route 7 Corridor Improvements

            Route 7 leading to Tysons.. Click to view full-size photo

            Begin Date
            $265 million

            This project will widen a 6.9-mile segment of Route 7 from four to six lanes between Reston Avenue and Jarrett Valley Drive, ……an important improvement to the corridor that will link northern and western Fairfax with the county’s planned revitalization of the busy Tysons Corner area.


            this is on top of the billion plus dollars that taxpayers provided for the Metro Silver Line.. right?

            I’m not begrudging the money – it’s an investment to spur economic development that will – ultimately benefit all of Va since NoVa tends to subsidize RoVa… anyhow.

          5. The Silver line is being paid for primarily from toll on the Dulles Toll Road. Like most things in this country it is on the credit card. And if the sharp rise in tolls discourages many drivers or if the coming reduction in federal spending comes about then those tolls might not pay the bill for those riding the train. Who knows what would happen then.

          6. LarrytheG Avatar

            $300 million from Virginia , 900 million from the Feds:


          7. TooManyTaxes Avatar

            I’ve been told by county financial employees that the ratings agencies consider Fairfax County’s share of VRS obligations in making their debt rating decisions, as well as liabilities to county-specific pension funds.

            Both state and federal taxpayers will be contributing to roads in and around Tysons and related transit. The County has a 40-year funding plan that assumes the use of some federal and state tax dollars to build Tysons roads. I’ve seen the spreadsheet. Of course, Tysons landowners, including residential ones, are paying higher taxes to fund roads as well. Citizen advocacy was responsible for shifting some $400 million over 40 years from general taxpayers to landowners. Since landowners are gaining the most from the new and expanded roads, a special property tax is the best and fairest tax to fund these improvements, especially as the Silver Line Phase 1 special real estate taxes are being reduced over time.

            State and local governments are not alone in pushing for higher investments on pension plans. My former employer went several years without making any contributions to its pension plans because the earnings were more than the amount of increased liability. So long as this is the case, there are no ERISA problems.

          8. TooManyTaxes Avatar

            Route 7 widening. FC DOT has called this the second most important single road project for Tysons, after the Jones Branch extension. The project was on VDOT’s six-year plan for many years, but was later removed due to opposition from the Fairfax County BoS. Later than opposition was reversed and turned into support. VDOT put Route 7 back on the list and with the new transportation funding plan, has allocated funds for planning and RoW acquisition. The funding plan has advanced a number of projects in NoVA and is seen by many officials as a sounder funding plan as the gas tax is a dying source of funding with higher mileage vehicles and more alternative fuel vehicles.

            One of the biggest objections I hear is the requirement for projects to be funded based on congestion reduction, which most people support. The transit at any cost folks don’t like what they see as inappropriate road construction and the land speculators are generally angry that their pet projects often have a hard time passing the required tests. So all and all, it looks reasonable to me.

          9. LarrytheG Avatar

            on pensions – there is a Federal govt agency known as PBGC – Pension Benefit Guaranty Corp – it has over 5000 pensions that were “unfunded”…

            on Fairfax Transportation –

            If Fairfax were to do what Arlington and Henrico have done – take over their own roads – how would this affect Tysons?

          10. TooManyTaxes Avatar

            Larry, Fairfax County will not take over its local roads. The county does not trust the state to provide on a regular basis the same amount of money VDOT spends on local roads. It does not want to take on the costs of more employees to maintain local roads. And the county believes (correctly in my opinion) that residents would demand better maintenance than the state provides, which, in turn, would require even higher real estate taxes, which most people don’t want.

            Our own The Donald will fund a statute of Judge Dillon before Fairfax County takes over local roads.

          11. LarrytheG Avatar

            Don’t know about the “trust” issue – does Fairfax “trust” VDOT to do the roads in their 6yr plan any more? Does VDoT have a reputation of not funding Arlington or Henrico or other cities and towns?

            At any rate – my question related more to how Fairfax would handle projects like Tysons if they had to take more direct responsibility for the transportation impacts and did not have VDOT to fall back on.

            I strongly suspect if one were to tally up all the projects that Fairfax is getting funding for from the State and the Feds – it would be far, far more than any other place in Virginia. A 2 billion dollar low interest TIFIA loan in addition to a 900 million grant from the Feds and 300 million from the State for Metro and more money for the beltway HOT lanes and now I-66…

            Again – I’m not begrudging it – ultimately investments in NoVa will benefit all of Va.. and no matter how one feels about NoVa reliance on Fed money for jobs… it still presents us with a solid opportunity to transition to a private sector knowledge-based economy because NoVa has without a doubt one of the most robustly educated labor market in the country and certainly in Va.

            NoVa is the recipient of LOTS and LOTS of money for transportation from taxpayers outside of NoVa..

  6. Hill City Jim Avatar
    Hill City Jim

    Here in the Hill City, with some of the highest fiscal stress rankings and extraction rates (tax revenue vs. revenue capacity) in the state, we are blessed with one of the poorest performing public school systems as well, whose Educrats are always screaming for mo’ money because, “look what they spend in NOVA.”

    Without “Robin Hood assistance” from the more wealthy localities we would just dry up and blow away!

    1. LarrytheG Avatar

      I DID notice Lynchburg’s status also. not good.

    2. Cville Resident Avatar
      Cville Resident

      Hill City,

      I noticed that the 2014 Census estimates now have Lynchburg near 80K in population. What’s driving the recent population growth (since 2000), and do you think it will have a positive effect on the city?

  7. I do not know about the short term but there are potentially huge long term financial issues for the Commonwealth. And we have gloried in having so many defense contractors and growth in that area is extremely limited unless we jump into a war somewhere.
    I would guess that 80-90% of Virginia’s economy is driven directly or indirectly by federal spending. In Southwest Virginia where I grew up the economy has to be 90% federally driven – SS, Medicare, Medicaid, student loans, state and local retirement programs, transfered tax dollars from Nova to rural counties while the taxes Nova pays to Richmond come almost entirely from federal funds…which we have borrowed trillions to spend here and there…we have paid for it.
    And our state finances are out of whack. The McDonnell transportation plan completely abandoned Harry Byrd’s “Pay as you go” philosophy. Rather than tax the users of the roads we tax the reverse mortgages of elder citizens. Virginia is the only state other than Texas that taxes reverse mortgages like it is expenditure. We do not tax the elderly when they get their money out monthly through reverse mortgages we tax them on the whole amount of the mortgage.
    And there are many Rube Goldberg schemes in the Virginia tax law. And we are not investing in things that might give the Commonwealth a better shot at a future economy not driven entirely by borrowed funds spent by the federal government. We are not investing in infrastructure like we should. Our universities are not even average when it comes to research spending and no one has even admitted that it is a problem. Virginia is short changed by lack of a major private research university like Duke, Johns Hopkins, or Vanderbilt etc. Many states without a major private research university have sought to make one or more of their state universities a major research institution – Texas, Washington, Michigan, Illinois, Ohio, etc.
    Simply stated there is no Virginia economic game plan. And as the world changes and we have another NAFTA we are left with the same old hand in a very tough global poker game. Where is the vision for a 21 Century Virginia? Where?

    1. LarrytheG Avatar

      Did not realize that about Reverse Mortgages… and it does not sound right to me. Isn’t that essentially like selling your house and living off the proceeds ?

      If you sell your house – it’s exempt from Federal taxes up to 250K I believe. Is that not the case in Va? you would ow taxes on the interest earned but not the sale of the house… it would seem.

      The idea that Va is not investing enough in transportation and education is hard to gauge.. how would we do that in a way we could rank the states and Virginia’s position? Do we actually have a state fund to provide Universities with money for R&D?

      Roads ? how would what Va does be different from other states? Is it simply how much money is spent or is it what is spent on certain things other states spend on that we do not?

      1. When you sell your home in Virginia there is a recording fee/tax collected by the city or county and then the state collects a recording fee on top of that. And then if a buyer gets a mortgage then they have to pay a recording fee or transfer fee to both the state and the locality. Both buyer and seller pay the recording/transfer tax. But if you get a reverse mortgage then the owner of the house has to pay a recording fee/tax to the state on the full amount of the mortgage even though the owner will receives the selling fee not in a lump sum but over their life. Only Texas taxes reverse mortgages.
        And about what states do on roads. No state has the convoluted set of taxes to support transportation investment like Virginia has. NC and Tennessee and Maryland all have better maintained roads than Virginia.
        And investment in schools—we are moving toward free community colleges across the country…several states have already done that. Tennessee which has no income tax has made community colleges free and each Tennessee high school graduate gets a $4800 per year scholarship if they attend a public private Tennessee college.
        So times are changing and any state that depends on increased federal spending is not going to do well. Virginia needs are real 21st Century economic development strategy. But who is even talking about it for Virginia?

        1. LarrytheG Avatar

          so what specific things is Virginia failing to do that other states are doing – to support/improve/bolster non-govt economic development?

          or do we do all the things but we don’t do them as well?

          You know – you’d think this would be right up the Alley of groups like ALEC, Heritage, etc.. or is it more of the view that there are things that Va is already doing – that INHIBITS – private sector economic development.

          I’m not convinced that there is a real “recipe” … but how well we manage the fiscal affairs is not really directly connected to how well we develop economically.

          we could be the crappiest state in the union on economic development but the very best in terms of responsible management of the monies we do collect and spend.

          and one more question – why is it the job of the state to spur economic development – and not the locality?

          1. Why should the state invest in economic development and not leave it to the localities is like saying that the federal government should not invest in national defense …just let the states do it.
            Important to economic development is a first rate transportation system. Should Virginia do this or say ho hum that is a county responsibility.
            Virginia does not do that buy has abandoned Harry Byrd’s “pay as you go” game plan for transportation investment. We do not want to charge those who use the system but rather we apply a sales tax on the reverse mortgage senior take out to sustain their quality of life.
            So it is not pushing all responsibility for investment in the future back to local government but we are taxing other non-transportation related activities including taxing senior citizens when they take their equity out of the their homes to survive.
            We have totally abandoned the Harry Byrd conservative approach to investment in the future. And we throw up our hands and say “What the heck let’s make sure the Federal government borrows more from China to fund our defense which is the largest component of Virginia’s economy.
            The same is true in many other elements of future economic development such as advanced research. We say it is the federal government’s responsibility. And we say that again and again with no articulated strategy or vision for long term economic development.
            Poor Harry I bet he is turning over and over in his grave.

          2. LarrytheG Avatar

            slow morning on BR …so…

            transportation first – Virginia is but one of four states that takes care of county roads.. 46 other states make the locality responsible for local roads and even in Virginia – all cities and towns and 2 counties have that responsibility.

            that responsibility at the state level tends to pit state level transportation priorities against localities priorities (which can be costly to state priorities) and sucks up a lot of transportation money that in other states is available to the State DOT to do transportation. Localities actually create unfunded liabilities by the way they make land-use decisions with little regard to how those decisions impact the transportation network – which in turn affects potential companies consideration of locating. Localities in Va who rely on the State to do transportation are their own worst enemies as they routinely make land-use decisions that often adversely impact roads. The presence of expensive bypasses to go around the original roads is an indication of this.

            Even having said this – I’m trying to look at Virginia’s state level roads and see what is lacking compared to other states.

            next – economic development

            the one thing that can make or break a locality’s ability to attract a business – is the availability of an educated workforce and good schools.

            The state already plays a significant role funding education and setting standards but many localities in Va not only resent the State’s involvement in standards – they actually use the state money to reduce local taxes – as has been pointed out by BR commenters from NoVa.

  8. Peter Galuszka Avatar
    Peter Galuszka

    Funny that McAuliffe is announcing a surplus today!

    Ah, the Mercatus INstitute, funded by the Kochs.

    1. LarrytheG Avatar

      Oh I’m sure he will be accused of using budget gimmicks and worse!

      If someone had asked me a number of years ago who had the better chance of coming a cropper on ethics and law I would have picked McAuliffe over McDonnell in a heart beat! The man oozed used car salesman aura and a FOB to boot!

      then today I read this:


      ” The politicians piled in by the dozens to say it would create chaos to let stand a Virginia jury’s finding that former Gov. Bob McDonnell was corrupt — a stance that shows they may be out of touch with voters’ views on ethics, political scientists say.

      The jury’s finding “would wreak havoc on the public life of Virginia” unless overturned, six former Virginia attorneys general from both parties, four of whom were elected, warned the 4th Circuit U.S. Court of Appeals.

      From the General Assembly, 39 current and former state senators and House members weighed in on much the same line.”

      ” But on Friday, a three-judge panel of the appeals court disagreed.

      “There is a very strong disconnection between what the Virginia public thinks is over the line and illegal and what the political class thinks is acceptable behavior on the part of public officials,” said Quentin Kidd, a political scientist at Christopher Newport University.”

      “What judges and juries think constitutes corruption does not align with the views of elected officials past and present … there are very different perceptions at work here,” said Mark Rozell, professor of public policy at George Mason University.”

      ” The sheer numbers of elected and former elected officials who rallied to McDonnell is sign of deep hypocrisy about a culture of corruption, said Olusoji Akomolafe, chairman of Norfolk State University’s political science department.

      “While politicians rant about (a person) who gets a couple of hundreds of dollars in food stamps, they flock to the aid of McDonnell who, while breaching the public trust, took advantage of his office to pocket $177,000,” Akomolafe said.”

      1. Lionel Hutz Avatar
        Lionel Hutz

        At this point, the silence at Bacon’s Rebellion about the McDonnell appeal is simply deafening.

        1. I’ve said everything I have to say about McDonnell. If the courts rule against him, well, that’s a shame. All I can hope is that the expansive interpretation of law is applied equally and fairly, not used as a tool to “get” one’s political enemies.

          1. Lionel Hutz Avatar
            Lionel Hutz

            Ah, I see. You’ll do a drive-by hatchet job implying that the prosecution was politically motivated, but never address the fact that a three-judge panel of the Federal Appeals court, two of whom nominated by Republicans, looked at McDonnell and said “Nope, no way.”

            And, if you don’t want to address it, that’s fine. Maybe the fact that the “Was McDonnell Convicted With Tainted Testimony” story that is part of the scroll at the top of the front page should taken down then? Because otherwise it appears that you want to implicitly characterize the trial as b.s., without ever having to deal with the messy facts of what actually happened with said trial.

          2. A “drive-by hatchet job” — really? What made that article a hatchet job? The fact that you disagreed with my conclusion?

          3. Lionel Hutz Avatar
            Lionel Hutz

            No, not the article, your comment above wherein you state:

          4. Lionel Hutz Avatar
            Lionel Hutz

            Er, where you state:

            “All I can hope is that the expansive interpretation of law is applied equally and fairly, not used as a tool to ‘get’ one’s political enemies.”

            If you really had said everything you had to say about the McDonnell case, you could have left it with the first sentence. Adding your deep sense of concern looks gratuitous, and one more swipe as you exit the door. Which is fine, but own it.

          5. How was the call for fairness in application of the law a “hatchet job?” Republicans should fear how Democrats will misuse the law, and Democrats should fear how Republicans might misuse it.

          6. LarrytheG Avatar

            you act like there is no such thing as justice.. just revenge…

          7. I repent. Never was there a prosecutor who pursued a conviction with a political aim in mind. (Joe McCarthy excepted — but he was the ONLY one.) I apologize for my cynicism.

    2. Cville Resident Avatar
      Cville Resident

      Glad you mentioned that….when I heard the news this morning on the way to work, I thought about this post. Seems a bit incongruent with the idea that the Commonwealth is in poor fiscal shape. I also thought the “Rainy Day Fund” was fully replenished….which, again, doesn’t seem to indicate Virginia is in bad shape. Finally, as I’ve posted before, VRS enacted some major reforms in 2012. They haven’t been in place for 3 years yet. Let’s wait a full 5 years to see how the reforms play out….

      1. The report was based on FYY 2013 data, and says so explicitly, as I did in my post. We’ve just closed out FY 2015. Two years can make a difference.

        I agree with you, though, that we should see how the VRS reforms pan out before drawing any hard-and-fast conclusions. As Haner says, Virginia still has a AAA bond rating. That still counts for something.

  9. LarrytheG Avatar

    then we have this: ” O’Connor: Pamunkey ruling brings financial risk to Virginia”

    As many are now aware, the U.S. Interior Department’s Bureau of Indian Affairs this month approved the petition of Virginia’s Pamunkey tribe for recognition. ……..sometime this fall, the Pamunkey tribe will become a sovereign nation within the commonwealth of Virginia.

    How is that significant?

    “Federal Indian reservations are generally exempt from state jurisdiction, including taxation, except when Congress specifically authorizes such jurisdiction. … Furthermore; federally recognized tribes possess both the right and the authority to regulate activities on their lands independently from state government control.”
    Our principal concern with the impending sovereignty is the tax evasion issue. In other states with sovereign tribal governments, major disputes have arisen related to tobacco products and, in some instances, motor fuels being sold tax-free to nontribal members.
    Imagine the advantage a tribal store would enjoy if it were not required to collect the state tax of 30 cents per pack for cigarettes or the state fuel tax of 16.8 cents per gallon

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