Virginia will pay an estimated $594 million in 2012 to service its $9 billion in tax-supported debt. That will make interest payments the sixth largest category of expenditure in the General Fund budget, behind public education, Medicaid, higher education, corrrections and the car tax rebate.
And those numbers do not include debt on transportation projects, or the money “borrowed” from the Virginia Retirement System.
The analysis comes from a 30-page reported prepared by the Senate Finance Committee staff for presentation to the committee during a November 18 retreat in Staunton. Reports Jim Nolan with the Times-Dispatch:
The report paints a picture of a commonwealth that is in deeper debt than it has ever been — to the point where it cannot borrow any more money if it wishes to stay within a self-imposed debt capacity cap of 5 percent of annual tax revenues.
The state has stacked on loads of new debt since 2007, including the three largest debt authorizations in the state’s history: $3.2 billion for transportation (parts of which were deemed unconstitutional), $2.8 billion for a capital improvement program, and $1.4 billion for capital construction projects in eduction.
Virginia cannot afford this nonsense anymore. Federal aid to localities under the “stimulus” bill is coming to an end. Medicaid burdens continue to mount. The economy, especially the housing sector, will continue to lag and tax revenues will remain depressed. Legislators simply must adapt to the new fiscal reality… or they will face the same treatment at the polls next year meted out to federal officials in November.