Receiving a check from the state government for $400 is very nice – the amount given to many joint filers, with $200 going to single filers. This money was available because 2024 was such a good year economically. Job growth was higher than predicted in Virginia, meaning more taxes than expected were collected and funds remained after meeting budget obligations. Virginia was named then as CNBC’s top state for business, and the U.S. economy was performing better than all the other developed nations. The leftover money in the state budget was distributed to help meet a variety of needs, including giving some back to us!
Things changed in 2025. Virginia’s CNBC ranking went down to fourth place – it’s worst ranking since 2018. The national situation is hard to determine – as many of the economic measures historically used for evaluation no longer are being provided by the federal government. We do know that nationally, job growth has declined tremendously. The Bureau of Labor Statistics’ Local Area Unemployment Statistics Program recently reported that Virginia lost more than 43,000 jobs between April and June 2025. If fewer people are working, fewer taxes will be collected, and certainly it is possible that 2025 could result in a budget deficit rather than the surplus of 2024!
Compounding our economic problems is that inflation continues. Regular grocery shoppers know that things simply cost much more than they used to. I’ve found some of the changes subtle – although a bit deceptive – when I look at my groceries and find that the price hasn’t change much but the amount in the package has been reduced. Take a look at your cereal boxes sometimes – they seem to be approaching single serving in what used to be a family sized box.
Energy bills will most likely rise meaningfully, too. This year state legislators let Appalachian Power securitize to cover such expenses as high fuel costs (it was an expensive year for natural gas and coal) and recovery from storm damage. The power company raised funds by issuing about $1.4 billion in 20-year bonds. This means that 20 years from now we will still be paying these past costs while also paying for current costs! And – future costs are likely to skyrocket because of sharply increased demand (driven by such things as data centers and crypto currencies) and lack of investment in modern energy production.
Fossil fuels simply are not sufficiently cost-efficient to meet the challenge of reducing energy costs while increasing supply – and are expected to become increasingly expensive going forward.
So … let’s enjoy our current financial windfall! It can help us pay some bills, invest to meet future needs, and have a generous holiday season. While enjoying this unexpected money, remember that times have changed and higher costs (including our electricity bills) and fewer jobs are likely to face almost all of us going forward.
