- The Washington Times - Friday, September 2, 2011

Gov. Bob McDonnell has issued his 39th executive order, establishing a task force to analyze Virginia’s economy in advance of likely federal spending cuts — a measure that he had previewed in his address to the General Assembly’s joint money committees last month.

The task force will be led by Lt. Gov. Bill Bolling, and will include Secretary of Commerce and Trade James Cheng, Secretary of Technology James D. Duffey, Jr., Secretary of Veterans Affairs and Homeland Security Terrie Suit, Senior Economic Advisor Robert C. Sledd, Director of the Office of Intergovernmental Affairs Jeannemarie Davis, the President and CEO of the Virginia Economic Development Partnership — a position that is currently unfilled — and other economic development leaders.

Mr. McDonnell last month announced his intent to issue such an order, and urged the General Assembly to set aside $30 million of the state’s $545 million fiscal 2011 surplus funds to gird for future cutbacks in the state, which is heavily reliant on the federal government in driving its economy. In 2009, Virginia ranked second in the country in total per capita federal expenditures.

On July 19th, the credit-rating agency Moody’s placed five states, including Virginia, on review for downgrade. It confirmed the state’s AAA rating on August 4th, but assigned Virginia a negative outlook because of the federal government’s significant impact on the state’s economy. Over the next three months, the agency will be looking at ratings of state and local bond issuers, including Virginia, to determine whether they should remain on negative outlook or be reassigned as stable.

Mr. McDonnell wants the General Assembly to create a contingency fund, initially capitalized with $30 million, to prepare for the downsizing of the federal government and reassure the credit rating agencies that Virginia has ample cash reserves. In announcing the plan, Mr. McDonnell acknowledged that the relatively small amount was just a start, or a down payment, and he intended to do more going forward.