RICHMOND — Gov. Ralph Northam celebrated Virginia's record $2.6 billion budget surplus and "roaring" economy in a speech to legislators on Wednesday, while also cautioning that the resurgent coronavirus poses new risks to state finances and public health.

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       In his annual address to the state House and Senate money committees, Northam (D) ticked off a list of economic indicators that seemed unattainable as the pandemic first gripped the commonwealth in early 2020.

       The state’s unemployment rate, for instance, is 4.3 percent — well below the 5.9 percent national average and lower than in all its neighbors, where joblessness ranges from 4.4 percent in Kentucky to 7 percent in D.C.

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       “We can all be proud of Virginia’s position today,” Northam said. “We have laid out a path for economic prosperity and it is working.”

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       But Northam also warned that the crisis is not entirely behind Virginia, where the highly contagious delta variant is fueling a recent surge in cases. He also acknowledged the heavy financial and personal toll the pandemic has taken on Virginians.

       “While we have a lot of positive news about our economy these days, we know that a lot of people are still struggling, and still hurting,” he said.

       The upbeat parts of Northam’s speech were more than a victory lap for a term-limited governor who leaves office in early January. The two major-party candidates seeking to replace Northam, whom the state constitution prohibits from seeking back-to-back terms, have made his handling of the pandemic and broader economy central to their campaigns.

       Is Virginia an economic success or ‘in the ditch?’ Depends on which candidate you ask.

       Republican candidate Glenn Youngkin, a former private-equity executive, has often accused Northam of driving the state into “the ditch,” while Democratic candidate Terry McAuliffe, a former governor who left office as Northam’s term began in 2018, praises Northam’s oversight of state finances as an extension of his own policies.

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       Youngkin’s campaign did not immediately respond to a request for comment on Northam’s speech, which included a mention that CNBC had recently crowned Virginia the best state for business. In the past, Youngkin has pointed to the state’s large surplus as evidence of overtaxation, saying he would return $1.5 billion of it to taxpayers.

       Youngkin also has said he would like to eliminate the state’s personal income tax — which accounts for more than 70 percent of the general-fund portion of the budget that a governor and legislature control.

       McAuliffe, who has said Youngkin’s income tax elimination plan would destabilize the state’s finances, praised Northam’s financial stewardship after the speech.

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       “Virginia’s economy is stronger than ever thanks to eight years of fiscally responsible Democratic leadership,” McAuliffe said in a written statement. “We cannot risk our future on Glenn Youngkin’s dangerous economic agenda, which would lead to drastic cuts to public education and police and drive our economy into the ditch.”

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       As he opened his speech in the Pocahontas Building on Richmond’s Capitol Square, Northam counted his in-person delivery as a victory; his August 2020 revenue speech, December budget address and January State of the Commonwealth address were all virtual because of the pandemic.

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       “It’s good to be together again,” he said. “We are here in person today because of one thing: vaccines.”

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       He noted the state’s high vaccination rate — 74 percent of adults have had at least one shot and 66 percent are fully vaccinated — but said that’s not enough given the threat of the delta variant, which can sicken even vaccinated people, although not as severely as the unvaccinated.

       A year ago, the state forecast revenue collections to grow by only 2.7 percent, based on recommendations from economists and Virginia business leaders whom the state routinely consults. Tax revenue shot up instead by 14 percent.

       Crediting conservative budgeting for helping to protect the state’s coveted Triple-A bond rating, Northam said he will exceed his goal of having more than 8 percent of the budget in reserve funds. He said the state is on track to have almost 15 percent in reserves by the end of his term.

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