Try as he might, Governor McDonnell has been unable to stem a rising tide of debt despite claiming budget surpluses each year he has been in office. Gimmicks like underfunding the Virginia Retirement System and the attempted liquidation of the ABC stores were smokescreens. This will be the McDonnell legacy.
The sorry fact is that Governor McDonnell has added billions to the debt of the Commonwealth. Holding him responsible only for the two full fiscal years that he owns completely (2011 and 2012), debt has risen $ 4.29 billion from $ 31.8 to $36.1 billion. That is a whopping 13.5% increase in only 2 years. And his budgetary genius will continue to daunt the Commonwealth for the next two fiscal years. That could mean that McDonnell would leave office with the legacy of a full one-quarter of all Virginia debt obligated during his single term. Who is a burden on our children’s future?
The next Governor faces a situation that was a red herring in the last gubernatorial race: increased costs of elevated debt rising from a reduced bond-rating. While there is no reliable metric for determining the risk threshold for bond ratings, the ratio the state has used to mitigate that risk is sounding a warning that that threshold is about 2 years out. As Republicans like to say, the market will be the final arbiter. And as Democrats in Virginia have learned, the consequences of Republican policy always occur on the Democrats’ watch (See Mark Warner).
What that means is that despite a victory of sorts for the transportation funding, other areas of government spending will remain tight until the economy improves dramatically unless we continue to borrow or we raise taxes. Increased taxes are probably not going to happen before any calamity. Of course, borrowing will lead directly to breaching the bond rating threshold, increasing the cost of debt and threatening the funding for already underfunded programs; a vicious cycle.
With the threshold two years away and limited influence over the budgets for the intervening fiscal years, Terry McAuliffe wants to deal with this mess? And what exactly would Cuccinelli do? The prospects are onerous.