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Every politically sentient Virginian knows that the state Constitution prohibits the state from borrowing money to cover operating expenses of government. Everyone knows that the General Assembly snuck around that restriction by under-funding payments to the Virginia Retirement System, effectively borrowing from the state employees’ pension. Less widely known is that the state, or, more exactly, the state’s unemployment fund, has borrowed $568 million from the federal government to keep up with unemployment payments.
The state has about a year and a half to pay that money back. According to the Washington Times, it may have to borrow $251 million to make those payments.
If it’s any consolation, many other states are deeply in hock as well. California is $8.5 billion in debt, Michigan $3.1 billion and New York $2.8 billion, according to the Pew Center for the States. On the other hand four states — Hawaii, Massachusetts, New Hampshire and Texas — have paid off their federal loans.
How’s that AAA bond rating looking?
— James A. Bacon
