Two dubious legacies are already emerging as the hallmarks of Bob McDonnell’s tenure as governor. The first, certainly not entirely his fault, is the burgeoning shortfall in the Virginia Retirement System, which now is only funded at 68% of its future liabilities. The second is a failing transportation system with an inadequate revenue stream to maintain and modernize it, even as McDonnell happily acquiesced to a phony transportation plan driven by debt, much of it to be paid back with future federal road money, money certain to be cut in subsequent federal budgets.
Get ready for one consequence from the VRS shortfall in the next session of the General Assembly. Now that the GOP controls all of state government, I fully expect some form of defined contribution (401k) VRS retirement plan to pass the General Assembly.That’s how the state will deal with its past irresponsibility. All the risk and vagaries of the stock market will be shifted onto future retirees, while state services will suffer to pay back some of the past VRS fund borrowing.
As for transportation, the Republican aversion to paying for necessary vital services with tax revenue means that McDonnell is punting the continuing crisis in transportation down the field to a successor. By using the typical Republican ploy of borrow and spend, McDonnell has assured that he won’t have to solve that problem, one that has been screaming for a solution for years.
So, get ready Virginia. Federal budget cutbacks will have serious consequences for our state, felt most severely in northern Virginia and Hampton Roads. The two biggest money problems in the state have been swept under the rug yet again. Meanwhile, our state tax system has loopholes and tax expenditures almost equal to the revenue the state does collect. All of this means there is a fiscal train wreck in our future, especially if voters continue to elect Republicans.