Virginia is one of the best-managed states in the nation, as evidenced by its long-standing AAA bond rating, its accolades from the PEW Center on the States, and top marks from other leading national organizations.
Why is This Important?
The challenge for all governments, large or small, is to serve the public trust with honesty, responsiveness, and good stewardship. With a 2014-2016 biennial operating budget of more than $95 billion and approximately 117,000 salaried and wage employees who serve a population of more than 8 million people, Virginia’s state government is necessarily complex.
In addition, Virginia -- whose economy is more reliant than most on federal defense spending and federal jobs -- has recently felt the economic sting of cuts associated with the federal budget sequestration that began in 2012; although those cuts have eased somewhat, Virginia is still dealing with some economic uncertainty as a result. At the same time, amid growing concerns about job stability, health care, and education, there are increasing demands on state government to work better, cost less, and be more transparent.
The Pew Center on the States awarded Virginia the top overall grade for government performance in 2005 (along with Utah) and again in 2008 (along with Utah and Washington), based on their assessment of how well the state managed its people, money, infrastructure, and information. Virginia has long been recognized as one of the best-managed states in the nation according to these and similar criteria.
The following sections offer performance data in several broad categories of government operations:
Virginia was among the first states to develop and sustain the comprehensive integration of planning with budgeting and performance management. Since 2003, state government has made significant progress in establishing an infrastructure that focuses on strategic goals while improving the efficiency and effectiveness of government operations. Performance evaluation and increased accountability are key.
This site, Virginia Performs, is the public face of that performance management and accountability system.
Bond Rating. Virginia has held an AAA bond
rating for 77 years, longer than any other
state. This rating reflects a tradition of
fiscal prudence and a culture of identifying
Expenditures. The goal of any government is to provide quality services and needed public infrastructure at the lowest cost possible and without incurring undue debt. Numbers alone for debt and expenditures cannot speak to how well these goals are being met, but do provide an indication of per capita debt and spending across the country.
The latest data indicate that in 2013, state and local government expenditures per capita in Virginia were $8,942, which ranked Virginia 18th lowest among the states and lower than the U.S. average of $10,137. Among regional peer states, per capita expenditures were lower in North Carolina ($8,724) and Tennessee ($8,514), but higher in Maryland ($10,246). Idaho was lowest in the U.S. at $7,286 per resident.
Debt. 2013 state and local government debt per capita in
Virginia was $7,926, ranking Virginia 26th lowest
in the nation and below the U.S. average
of $9,347. Two regional peer states had lower debt loads than Virginia: North Carolina at $5,232 and Tennessee at $5,667; Maryland was higher at $8,248. Wyoming had the
lowest debt per capita in the nation at $3,423.
Procurements. Virginia’s eVA procurement system is an example of an innovative tool that was developed to hold down costs. eVA is a Web-based government-to-business program that standardizes and streamlines purchasing and creates a digital enterprise-wide procurement system. The Pew Center for the States cites it as a best practice that has also allowed Virginia to partially integrate with the federal General Services Administration and thereby take advantage of federal contract discounts. In FY 2014, 90.7 percent of state purchases and 90.8 percent of the total value of state procurements were processed through eVA.
Retirement System. Established in 1942, the Virginia Retirement System provides pension plans for certain state and local government employees, including public school teachers, law enforcement officers, and state agency workers. Due to various stresses over the past decade, the percentage of retirement system obligations backed by current assets decreased from 107 percent funded in FY 2001 to just 65 percent in FY 2013. This decline is due to years of lower contributions from the state and localities than actuarially required, as well as lower investment yields during multiple recession years.
Starting in July 2011, a mandate was reinstated for state workers to make contributions (5% of gross pay) to the retirement fund to help rebuild its assets. Subsequent legislation also mandated that the state begin to gradually restore its contributions to the retirement system; as a result, the percentage of state plan obligations backed by current assets rose to 72.1 percent in 2015. [The funded status for public school teachers was 69.2 percent in 2015, while political subdivision employee plans were at 84.3 percent.]
In 2016 the Virginia General Assembly decided to fully fund the employer contribution rates starting in FY17 and FY18, which puts the state as much as two years ahead of its statutory schedule. By fully funding these rates earlier than planned, the state is expected to improve the overall funded status of VRS retirement plans and to reduce future employer contributions.
The turnover rate among employees decreased markedly during the Great Recession and its aftermath, likely due to economic uncertainty: Turnover went from 14.5 percent in 2006 to a low of 10.1 percent in FY 2009 before sitting at 10.9 percent across FY 2011-2013. As the economy has rebounded, so has the turnover rate, which rose to 11.1 in 2014 and then to 13.2 percent in FY 2015.
An increase in the average age of new hires and lower turnover in the existing workforce contributed to an increase in the average age of workers, from 45.1 years old in 2006 to 46.7 in 2015.
The ratio of state and local government employees to Virginia residents was 53.8 per 1,000 residents in 2014, up slightly from 53.2 in 2013. Among U.S. states, that ranks Virginia 32nd, with Nevada again having the lowest number at 38.7 employees. Virginia has a higher number of state and local government employees per resident than Tennessee (49.4) and Maryland (50.5), but lower than North Carolina (55.3). The U.S. average was 50.8 state and local government employees per 1,000 residents in 2014.
According to the Virginia Information Technologies Agency (VITA), 100 percent of state agencies had a designated Information Security Officer (ISO) and 86 percent had written security audit plans in 2014. Over 92 percent of IT projects are on track, according to VITA's May 2016 quarterly update -- a dip from the previous quarter, but an improvement of as much as 55 percent over quarterly performance the previous year.
Major IT Projects with "On Track" Status, 2013-2016
|Report Date||Percent On-Track||Dollar Value of Projects|
|VITA Project Management and Oversight, Quarterly Status Reports|
PEW cites state project management systems in transportation as a best practice. Data from the Virginia Department of Transportation shows that the percentage of transportation-related construction and maintenance projects completed on time and on budget has fluctuated in recent years. The percentage of projects completed on time in 2016 went up slightly, to 83 percent; the percentage completed on-budget rose from 93 percent in 2014 and 2016 to 96 percent in 2016.
What Influences Government Operations?
Government performance is affected by community characteristics, workforce quality, federal mandates, political forces, economies of scale, and citizen involvement. The per capita administrative costs of smaller states are much higher than larger states because of the relatively high amount of administrative overhead needed to operate state government. Regardless of size, strong strategic leadership and a skilled workforce lead to improved program performance, higher productivity, and quicker adoption of innovative practices.
A high level of socioeconomic disadvantages among residents can create greater demand for public services and increased administrative expenditures associated with program delivery. These conditions can also occur on a temporary basis, as during a major economic downturn. Finally, citizen engagement is an important factor affecting improved government performance.
What is the State's Role?
The Council on Virginia's Future and the Department of Planning and Budget oversee the state's performance leadership and accountability system. A number of central agencies -- including the Departments of Planning and Budget, Accounts, Treasury, Human Resource Management, and General Services; and the Virginia Information Technologies Agency -- work to ensure the best use of public resources and oversee the major administrative functions of state government.
Three enterprise-level organizations conduct ongoing audits of Virginia state government to ensure the integrity and stability of state government finances and operations. Audit results are available on their respective websites.
- The Auditor of Public Accounts, part of the legislative branch of state government, is responsible for providing unbiased, accurate information and sound recommendations to state leadership to improve accountability and financial management.
- The Joint Legislative Audit and Review Commission (JLARC) is the oversight agency of the General Assembly, responsible for evaluating the operations and performance of state agencies and programs.
- The State Comptroller establishes and monitors state agency compliance with a uniform system of accounting, financial reporting, and internal controls.
As part of its commitment to accountability and transparency, Virginia state government maintains a number of transparency sites and initiatives via the state portal, where citizens can learn how state government is doing on a host of issues:
- how much the state budgets and spends
- how much localities collect in general property taxes
- how state government measures and tracks its progress, particularly on key economic indicators
State rankings are ordered so that #1 is understood to be the best.
Data Definitions and Sources
Knack, Stephen. 2002. Social Capital and the Quality of Government: Evidence from the States. American Journal of Political Science 46, 4: 772-785.
Pew Center on the States. Grading the States.
Worthington, Andrew and Brian Dollery. 2000. An Empirical Survey of Frontier Efficiency Measurement Techniques in Local Government. Local Government Studies 26, 2: 23-52.
State and local expenditure data are from U.S. Census Bureau, State Government Finances
(debt and expenditures are expressed in 2013 dollars using the Consumer Price Index)
Population data are from U.S. Census Bureau, Population Estimates (vintage, 2013)
Virginia Retirement System Funded Status (percentage of assets available to pay present value of all liabilities):
- VRS Status Report, presented to the Joint Legislative Audit and Review Committee (JLARC), July 2016 (pdf).
- PEW Charitable Trust, “The State Pensions Funding Gap: Challenges Persist,” July 2015
Percentage of state government procurement dollars processed through eVA, eVa Dashboard
State and local government Full-Time-Equivalent employees per 1,000 residents
State and local government employment data are from U.S. Census Bureau, Government Employment and Payroll
Population data are from U.S. Census Bureau, Population Estimates (vintage, 2013)
State Employee Turnover Rate, Average Age
Virginia Department of Human Resource Management (DHRM)
Workforce Planning Reports
Infrastructure and Information
Virginia Information Technologies Agency
2014 Information Security Annual Report (pdf)
Percentage of IT Projects on Track
Virginia Information Technologies Agency
Quarterly Major IT Project Status Reports
Percentage of State Transportation Projects On-Time
Virginia Department of Transportation
See the Data Sources and Updates Calendar for a detailed list of the data resources used for indicator measures on Virginia Performs.