Virginia, Maryland have mixed financial picture

Virginia avoided all eight financial warning signs in a new study, though several local governments and school systems did not.

Maryland received one state-level warning, while some of its counties, cities and school systems showed more financial pressure.

The Reason Foundation study looked at audited financial reports and measured governments in eight areas, including debt, available cash, spending compared with revenue and liabilities per resident or student.

A government received a red flag each time it crossed one of the study’s thresholds. Researchers said one red flag does not necessarily mean a government is in financial trouble.

Virginia was one of 23 states with no red flags.

The results were more mixed at the local level. Fairfax County received two red flags. Richmond and Norfolk received one each, while Chesapeake and Virginia Beach received none.

Several of Virginia’s largest school systems had more.

Chesterfield County Public Schools and Fairfax County Public Schools each received three red flags. Henrico and Loudoun County schools received two each. Prince William County and Virginia Beach schools received one each.

Chesterfield schools reported about $680 million in liabilities compared with about $254 million in assets, according to the study.

Fairfax schools reported nearly $4.1 billion in liabilities compared with about $3.9 billion in assets. That worked out to about $22,777 in liabilities per student, above the study’s $20,000 warning threshold.

Maryland received one state-level red flag, tied to its unrestricted net position, a measure of what remains after accounting for certain financial obligations and restrictions.

Some Maryland local governments received considerably more.

Baltimore County and Prince George’s County each received four red flags. Montgomery and Anne Arundel counties received one each.

Baltimore received five of the eight possible flags. The city reported about $9.7 billion in liabilities, or more than $16,000 per resident. It also received a warning because its liabilities were more than twice its annual revenue.

Maryland’s school systems varied widely.

Prince George’s County Public Schools received four red flags. Howard County Public School System and the Board of Education of Montgomery County received three each, the Board of Education of Baltimore County received two, and the Board of Education of Anne Arundel County received one.

Baltimore City Public Schools stood out in the other direction.

The school system received no red flags and was one of only two of the nation’s 100 largest school districts examined to avoid all eight.

The report relies largely on fiscal 2023 financial data, so the findings are not a current snapshot of government finances.

Reason Foundation said the study used financial reports from a database covering more than 20,000 state and local government entities.

Researchers said the measurements are intended to identify areas that may deserve closer attention rather than determine whether a government is in financial crisis.