Virginia's bond leverage is eroding due to too-frequent bond sales. Revenues from bond sales were three times the annual debt service in FY1993. During FY1996-98, revenues from bond sales decreased to twice the annual debt service. In FY2002 bond-sale revenues were only slightly larger than debt service. To obtain maxium leverage (revenues from bond sales would be at least ten times greater than debt service), bonds should not be sold until all existing bonds are paid off. Instead of bonds, Virginia should use a pay-as-you-go approach to funding capital projects.
Fairfax County Taxpayers Alliance