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 2012-2014 biennial operating budget of more than $75 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. Moreover, Virginia, like most states, has felt the stinging effects of the recession that began in 2008 and resulted in job losses, decreased home sales, and deteriorating tax revenues. 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 75 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 needed services and public infrastructure investment 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.
2010 state and local government expenditures per capita in Virginia were $8,548, which ranked Virginia 13th lowest among the states and lower than the U.S. average of $10,089. Among regional peer states, per capita expenditures were lower in North Carolina ($8,381) and Tennessee ($8,430) but higher in Maryland ($9,944). Idaho was lowest in the U.S. at $7,650 per resident.
Debt. 2010 state and local government debt per capita in
Virginia was $7,721, ranking Virginia 23rd lowest
in the nation and below the U.S. average
of $9,163. Regional peer states had lower debt loads than Virginia, with North Carolina at $5,436; Tennessee at $6,043; and Maryland at $7,368. Idaho had the
lowest debt per capita in the nation at $3,906.
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 2012, 89.1 percent of state purchases and 99.6 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 66 percent in FY 2012. This long decline is due to years of lower than actuarially required contributions from the state and localities, as well as lower investment yields during multiple recession years.
A recent report by the Pew Center on the States ranked Virginia, along with 14 other states, as “Needs Improvement” in the management of their retirement funds, based on funding levels, unfunded liabilities, and required contributions. 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. Thanks to legislation passed in 2012, beginning in 2014 the state will also be required to gradually increase its contributions to the retirement system.
The state government workforce is an important asset that must be managed effectively to maximize government productivity. The Pew Center on the States gives Virginia its highest mark for its management of human resources in strategic workforce planning, training, retention, and performance management. The turnover rate among employees decreased markedly over the last three years, from 14.5 percent in FY 2006 to 11.4 percent in FY 2011, though much of this is likely due to the economic recession. 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 years old in 2005 to 46.3 in 2010.
The ratio of state and local government employees to Virginia residents again decreased in 2011, from 55.4 per 1,000 residents in 2010 to 54.2. Among U.S. states, that ranks Virginia 26th lowest. Virginia has a higher number of state and local government employees per capita than Tennessee (51.1) and Maryland (52.7) but lower than North Carolina (57.6). The U.S. state average was 52.5 state and local government employees per 1,000 residents in 2011.
Virginia has received national recognition for its efforts in managing information technology and capital infrastructure. The National Association of State Chief Information Officers (NASCIO) gave Virginia top honors in 2009 for information security and technology management. According to the Virginia Information Technologies Agency (VITA), 98 percent of state agencies have designated an Information Security Officer (ISO) and 76 percent have written security audit plans. Seventy-four percent of information technology projects are on track as reported by VITA in its November 2012 quarterly update, a drop of over 6 percent from the previous quarter.
Major IT Project Status, 2009-2012
|Report Date||Percent On-Track||Dollar Value of Projects|
|VITA Project Management and Oversight, Quarterly Status Reports,
The Pew Center on the States cites state project management systems in transportation as a best practice. Data from the Virginia Department of Transportation shows overall improvement in the percentage of transportation-related construction and maintenance projects completed on budget, rising from 77 percent in 2003 to 95 percent in FY 2012. However, the percentage of projects completed on time has fluctuated in recent years, most recently dropping to 69 percent in FY 2011 before recovering to 81 percent in FY 2012.
What Influences Government Operations?
Government performance is affected by economies of scale, workforce quality, federal mandates, community characteristics, 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
- how funds from the American Recovery and Reinvestment Act of 2009 are being spent.
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.
Leadership and Accountability
Percent of new budget initiatives in the introduced budget bill with specified performance measures or outcomes
Virginia Department of Planning and Budget
Pew Center on the States. Trade-off Time: How Four States Continue to Deliver (February 11, 2009)
State and local expenditure data are from U.S. Census Bureau, State Government Finances
(debt and expenditures are expressed in 2010 dollars using the Consumer Price Index)
Population data are from U.S. Census Bureau, 2010 Census
Virginia Retirement System Funded Status (percentage of assets available to pay present value of all liabilities):
- Joint Legislative and Review Commission, VRS
Report, December 2012.
Various JLARC report formats and years can be accessed here: jlarc.virginia.gov/vrs_abt.shtml#
- Pew Center on the States, “The Trillion Dollar Gap: Underfunded State Retirement Systems and the Road to Reform”
Percentage of state government procurement dollars
processed through eVA
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, 2011)
State Employee Turnover Rate, Average Age
Virginia Department of Human Resource Management (DHRM)
Human Resources At-A-Glance
Infrastructure and Information
Virginia Information Technologies Agency
2011 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.