Virginia has a low rate of long-term indebtedness compared to other states, but the debt burden can still take a bite out of the budget. Virginia will pay nearly $600 million in interest in 2012 after borrowing record amounts during the past few years, reports Peter Smith for Virginia Statehouse News.
Interest payments will increase next year. Writes Smith:
Bill Echelberger, a Senate fiscal analyst, told lawmakers gathered at the committee’s fall retreat that Virginia had seen the “four largest tax- supported debt acquisitions” in history during the past four years, including Gov. Bob McDonnell’s $600 million transportation package.
The large scale borrowing is expected to increase debt payments by $50 million in fiscal 2012, which comes as the state prepares for budget cuts. …
Debt has more than doubled in the past six years, increasing from $5.8 billion in fiscal 2005 to $11.9 billion in fiscal 2011. Annual interest payments have increased at an even faster rate from $236 million in 2005 to a projected $593 million in 2012.
Not included in those sums is $54 billion in unfunded pension obligations.
If it’s any consolation, Virginia’s measly $600 million in interest payments compares to $240 billion budgeted for the federal government in 2012. Virginians account for 2.5% of the U.S. population, making our share of interest payments on the federal debt roughly $6 billion. Thus, the commonwealth’s debt burden is roughly one-tenth per capita of that of the U.S.
— JAB
