According to
Jeff Schapiro's article, "Virginia maxes out credit card", the answer is a most definite "possibly." Here's the problem:
Two days before Christmas, departing Gov. Tim Kaine and the General Assembly got the lousy news: that Virginia, under a self-imposed debt limit, cannot afford for the next two years to issue more bonds.
[...]
The bottom line: With the supply of public dollars at rock bottom, McDonnell is potentially denied an important tool that could give him some maneuverability to begin fulfilling his promise to fix transportation, among other problems, without raising taxes.
[...]
McDonnell would have to reconcile a heftier debt load with his campaign sound bites that suggested Virginians could have it all, even in the hardest of times, free of new taxes.
How does McDonnell get around this difficult, albeit largely self-imposed (by rigid ideology), conundrum? According to Jeff Schapiro, "it requires something supposedly anathema to a self-professed fiscal conservative such as McDonnell...declare it the policy of the commonwealth to incur more debt." Even if McDonnell breaks with conservative dogma, however, he still risks "maxing out Virginia's credit card." As we all know, maxing out our credit cards is not a particularly wise thing to do. Nor is racking up credit disproportionate to our income (aka, "revenues"). In the end, the outcome of borrowing more than we (individuals or Virginia) can afford is not going to be pretty: getting caught in an endless cycle of debt, going bankrupt, finding our credit rating going down the tube. That latter possibility is a real one, and it is how Jeff Schapiro chooses to conclude his ominous article.
...McDonnell and lawmakers run the risk of imperiling Virginia's highest-possible triple-A credit rating. Virginia, in the Moody's ratings, shares that honor with eight other states. But Virginia may be unique, in that it has enjoyed that distinction uninterrupted for more than 80 years.
And the last thing McDonnell wants in the run-up to the 2011 House and Senate elections is a who-lost-China-type debate over who wrecked Virginia's credit rating.
Unfortunately, I don't see an easy way out of this situation. McDonnell and the flat-earth House Republicans are extremely unlikely to raise revenues (aka, "taxes") and we've already cut pretty much all "inefficiency" out of state government. Which leaves the possible option of borrowing more money, but as explained above, that's extremely problematic (e.g., could "wreck Virginia's credit rating"). Which leaves...uh uh uh...no good options as far as I can tell. Unless, that is, Bob McDonnell is prepared to pull a "Nixon in China" by breaking with rigid, right-wing ideology and doing what's necessary to secure Virginia's future. It's Bob McDonnell's choice, we'll find out what he decides soon enough.
