Virginia just announced that it will have a larger-than-expected $400 million surplus. Certainly, this is good news particularly since the legislature and Gov. Bob McDonnell avoided economy-strangling tax increases. But I think it’s hard to call this an all-out-victory for conservative or libertarian governance for at least three reasons. First, Virginia’s tight balanced budget laws and long tradition of fiscal prudence means that it almost always runs a surplus anyway. That’s why the state is the largest with a AAA bond rating. Second, McDonnell and the legislature avoided tax increases in part by raiding employee pension funds. The Virginia funds weren’t in good shape to start with. This action could ultimately threaten the state’s precious bond rating. Finally, Virginia is a pretty government reliant state anyway. The growth of the federal government has meant that Northern Virginia (where I live) has seen few serious consequences from the still-lingering recession. McDonnell has done a decent job in Richmond. But a single balanced budget in a state that always has them doesn’t make him a hero.
VA Surplus: Good, But. . .
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