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A former state Secretary of Finance says, if Virginia lawmakers can’t agree on a budget by July 1, it could hurt the commonwealth’s financial standing.
“[The budget] is a big part … of our AAA credit rating, and to the extent that is jeopardized, that could impact us, and that has real consequences,” said Aubrey Layne, who is now the executive vice president and chief administrative officer at Sentara Health.
Lawmakers adjourned the regular General Assembly session on March 9 without finalizing a state budget.
Since then, Sen. Louise Lucas (D–Portsmouth), chair of the Senate Finance and Appropriations Committee, and Republican Gov. Glenn Youngkin have publicly criticized each other’s budgets, signaling a tense veto session on April 17.
Layne, who oversaw the state’s finances under Democratic Gov. Ralph Northam and transportation under Democrat Gov. Terry McAuliffe, said starting a fiscal year without a budget could endanger borrowing for future projects.
Like individuals, states get credit ratings based on several factors, including the ability to keep their governments open and functioning. Better credit ratings allow states to access financing options for major economic development projects, infrastructure and other big costs.
“We’re one of … 13 states that still have a AAA credit rating and, of course, when it comes time to do borrowing … we’ve been able to get very stable rates in the state of Virginia because of that,” Layne said.
Under the Virginia Constitution, the state must have a budget in place by July 1 or the government will shut down once operational funding runs out.
Unlike the federal government, the state can’t pass stopgap funding measures.