Virginia

State Budget Practice Report Cards and Budget Resource Guide

Virginia’s decision to make actuarially determined contributions to public worker pensions beginning in 2018 helped raise its average in legacy costs to C for fiscal 2017 through 2019 from D in the previous evaluation period.

The higher contributions, on top of other reforms enacted over the past decade, powered an increase in Virginia’s pension funding level to 79 percent in 2018, 7 percentage points above its 2016 level and about 9 points above the total for all states. While the state comes close to fully funding most of its other postemployment benefits (OPEB), its pre-Medicare retiree health care plan is run on a pay-as-you-go basis and does not meet actuarial goals. 

Virginia fared better in budget forecasting, in which it was one of only twelve states receiving a top A average. Each year, the governor submits an estimate of revenues and a six-year revenue projection for the general fund and other major funds, including transportation. The estimate reflects input from two advisory organizations representing the business community, economists, tax experts, and legislators. The Joint Advisory Board of Economists evaluates economic assumptions and econometric methodology, as well as data from the state Department of Taxation. The Governor’s Advisory Council on Revenue Estimates reviews the economic assumptions and state business climate and produces revenue projection recommendations. Virginia also averaged an A in reserve funds.  

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To emphasize the need for clear and comprehensible budgets to inform citizens, promote responsible policymaking, and improve fiscal stability, the Volcker Alliance in 2016 began a study of budgetary and financial reporting practices of all fifty states. The Volcker Alliance’s mission is to improve the effectiveness of the administration of government at all levels. Making state budgeting more transparent and accountable is an important part of that goal.

The report cards presented here are taken from the 2020 Volcker Alliance report, Truth and Integrity in State Budgeting: The Balancing Act, which proposes a set of best practices for policymakers. For those wishing to gain greater insight into state fiscal issues, the accompanying budget resource guide is derived from the Alliance publication State Budget Sources: An Annotated Guide to State Budgets, Financial Reports, and Fiscal Analyses (2016). 

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