Virginia State Finances Receive a Grade of “C”

Virginia continues to be a sinkhole state without enough assets to cover its debt. Repeated decisions by state officials have left the state of Virginia with a debt burden of $6.1 billion, according to Truth in Accounting's (TIA) analysis of Virginia most recent financial filings. That burden equates to $2,200 for every Virginia taxpayer, which is $700 worse than for 2015.

These statistics are troubling, but what's more troubling is that state government officials continue to obscure large amounts of retirement debt on their balance sheets, despite new rules to increase financial transparency. This skewed financial data gives state residents a false impression of their state's overall financial health.

Truth in Accounting is a Chicago-based nonprofit think tank that analyzes state financial reports when they are published. According to their report for 2016, Virginia only has $34.2 billion of assets available to pay bills totaling $40.3 billion. This means that the state has $6.1 billion shortfall and a $2,200 taxpayer burden™ which is each taxpayer's share of state bills after its available assets have been tapped. TIA's Taxpayer Burden™ measurement incorporates both assets and liabilities, not just pension debt.

Because of an accounting rule implemented last year, Virginia has to report its pension debt on its balance sheet. This year, the commonwealth's reported pension debt grew from $6.8 billion in 2015 to $7.4 billion in 2016. Despite reporting most of its pension debt, the state continues to hide much of its retiree health care debt. Virginia's total hidden debt amounts to $1.9 billion. A new accounting standard will be implemented in two years, and will require states to report this debt on the balance sheet.

The bottom line is that Virginia would need over $2,000 from each of its taxpayers to pay all of its bills, so it has received a “C” for its finances from Truth in Accounting.

Here is how Virginia compares to New York, Ohio, and Pennsylvania: http://www.statedatalab.org/c/3hJ2DWFYfb7de6c
Click on the link to go to an interactive chart at Truth in Accounting’s State Data Lab.