Why Are State Governments Broke?

There are lots of reasons but one of the big ones is spending on social services. Virginia is a great example. While Virginia is financially sound, unlike numerous other states, even a frugal state government has trouble with the escalating costs of social services. In the recent report of Virginia’s Judicial Inquiry and Review Commission on state spending, it noted that over the past ten years, on average, Virginia General Fund (the discretionary part of the budget) growth rates were about 20%. That’s a reasonable increase of about 2% per year to cover population and the very low inflation rates over this past decade. But spending on social services has increased at alarming rates. Comprehensive Service for At-risk Youth and Families, a 165% increase, Department of Medical Assistance Services 67% increase and the Dept. of Social Services a 42% increase. For these three, just in increases over the past decade now account for $1.256 billion per year. That is about 7% of our entire budget. Most of this is driven by the federal government that requires a state match for its super expensive programs. But if the federal government could work with the states and just limit these increase to twice the average increase (e.g. a 40% increase as opposed to a 20% increase over 10 years), Virginia would have another $445 million per year to either return to the tax payers, or to spend on our crumbling infrastructure (e.g. bridges, roads and tunnels).

Questions? Comments? Leave a message here or call Delegate Albo’s office at (703) 451-3555.

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