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Virginia's economy goes from pink to red

Not long ago, Virginia was considered to be in the pink of economic health. That diagnosis has turned dark red as the state and its municipalities pile up debt.

On paper, Virginia maintains a balanced budget. But government indebtedness is expanding faster than any single budget category — including the much-debated cost of Medicaid.

Debt-service expenditures jumped 120 percent since 2006, reports Jim Regimbal, principal of Fiscal Analytics Ltd., in Richmond.

See charts and here.

“We’re no longer doing pay as you go,” Regimbal told Debt-service expenditures, now around $600 million annually, will rise to $700 million within two years, he projected.

This month, Gov. Terry McAuliffe announced the state is forecast to take in $2.4 billion less than it’s budgeted to spend during the upcoming three years.

The problem is trickling down in a big way.

In 2012, the state Auditor of Public Accounts reported that Virginia counties carried a combined debt of $15 billion. An APA advisory panel recommended the agency no longer disclose debt figures, purportedly to give government spenders “more leeway.”

Regimbal says, “It’s time for a reboot” – and that means more private-sector jobs to grow Virginia’s economy.

“The government engine is over. We have to become an innovative economy, not a ‘managerial’ one.”

Watchdog reported earlier this month the state suffered more than 2,000 private-sector layoffs since May.

Additional information can be found here.

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