Virginia’s population of 8,382,993 makes it the 12th largest of the states, but the median family household income of $66,262 in the Commonwealth makes it the eighth wealthiest state in the country. With that introduction of statistics at my most recent State of the Commonwealth Breakfast, one might expect that nothing but good news would follow. Rather, what followed was a list of what might best be described as missed opportunities.
While overall numbers are impressive, the wealth of the state is not uniformly enjoyed. There clearly is a “golden crescent” in the state that runs from Northern Virginia where it is most bright south to Richmond and east to Hampton Roads where it loses some luster. The crescent if considered by itself would be one of the wealthiest and best educated in the country. With few exceptions, outside the crescent Virginians are struggling with incomes of one-half to one-third of that in its richest regions. Virginia as a state is doing well, but there are many within the state who are suffering. It would be impossible to replicate the advantages that Northern Virginia has being situated next to the Nation’s Capital nor can the misfortunes of the death of industries like tobacco, coal, and textiles be easily reversed. Given our overall wealth, there is a legitimate question as to whether we are doing as well as we should.
In public education funding, for example, the state direct aid per student has fallen. According to the Commonwealth Institute for Fiscal Analysis, per student funding of $5,966 in 2009 (in FY 17 dollars) is projected to be $5,326 in 2018. The result is that a greater share of education funding has been shifted to localities. In the 2008-09 school year, the state provided 44.1 percent of public school funding; in the 2015-2016 school year, the state share dropped to 41.3 percent. In past decades when Standards of Quality (SOQ) for schools were first adopted, the expectation was that the state would fund 60 percent of education costs. At the same time funding has decreased, the SOQ’s have been reduced. In 2016 localities spent $3.5 billion above the required local effort to fund the operation of its schools.
The news does not get much better in other areas. Virginia’s Medicaid program is the 48th stingiest among the states in providing benefits to those in need and one of the most difficult for which to qualify. At the same time, Governor McAuliffe reminded the legislative money committees that he has “called for Virginia to expand Medicaid for three and a half years now. In that time, we have forever forfeited a whopping $10.4 billion of our federal tax dollars. We have missed an opportunity to cover 400,000 low-income Virginians.”
How can we be so rich as a state and yet so poor in funding programs? Since 2004, Virginia has ranked in the lowest five states in state and local revenue as a percentage of personal income. In state and local revenue as a percentage of gross state product, Virginia ranks 49th. Our state sales tax rate is 41st lowest among the states. The state of the Commonwealth is that we get what we pay for.