The current state of the Commonwealth’s tax-supported debt is
exceptional. Conservative debt management practices and strong, consistent financial
management have resulted in the Commonwealth being recognized as a leader in public
financial management.
Through the joint efforts of the Allen Administration and the General
Assembly, the Commonwealth has continued to meet its priorities within the parameters
recommended by the DCAC. As a result of the 1997 moratorium on new tax-supported debt
authorization, increased general fund revenues, and low interest rates, it is expected
that the next report of the DCAC will confirm a substantial increase in the
Commonwealth’s debt capacity.
While additional debt capacity may exist, the DCAC has historically
recommended a degree of restraint for future debt authorizations in order to maintain the
Commonwealth’s stellar credit ratings.
Virginia’s credit status and the condition of the Commonwealth’s
debt structure are best described by the rating agencies:
"The Commonwealth’s superior credit standing results from conservative debt
management, cautious and prudent budgeting, strong financial management practices and a
broad and resilient economic base."
– Moody’s report, April 30, 1997.
"[Virginia’s] outlook reflects the Commonwealth’s continued strong
financial management and a forecast for steady economic growth."
– Standard & Poor’s report, September 29, 1997.
"Virginia’s outstanding general obligation bonds are rated ‘AAA’ by
Fitch, based on the Commonwealth’s substantial resources, conservative approach to
financial operations, and careful attention to the level and security of its debt
obligations."
– Fitch report, April 21, 1997.
"[The Debt Capacity Advisory Committee’s] recommendations are consistent with
financial goals, capital needs, and policies of the Commonwealth."
– Standard & Poor’s report, September 29, 1997.
"A rigorous debt management program assures that the debt burden will remain
manageable and debt levels will be below comparable state medians."
– Moody’s report, April 30, 1997.
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