On April 2 and April 8, 2025, respectively, the Virginia Senate special subcommittee and House emergency committee met to receive updates on how federal layoffs and budget reductions are impacting the commonwealth’s residents and state budget.
The Weldon Cooper Center, which included presenters Hamilton Lombard, Joao Ferreira and Terry Rephann, was able to provide clarity in data regarding numbers of employees as well as potential reduction rates and layoffs and their financial impact to the commonwealth. The reports indicate that there are 321,516 federal civilian employees, described as full-time, year-round, non-armed services members. That number increases when the number of federal contractors in Virginia is included – a sector that brings in $109 billion in federal funds each year. Together, the full-time employees and contractors make up 16% of Virginia’s total workforce.
In addition to the concerns over layoffs, the committees are also monitoring the impacts on Virginia and its local government’s budgets. Their estimate is that local governments receive around $4.4 billion dollars from the federal budget, including both revenues and direct aid. With decreased tax revenue from higher unemployment, Virginia could be looking at a shortfall of close to $250 million in revenues in its state budget this upcoming year. In addition to these impacts, there is also concern that if these individuals cannot find comparable work in Virginia, the state will see higher out-migration.
Presenters at the meeting offered some recommendations for the General Assembly, most of which focused on boosting support for safety net programs. These included: increased funding for housing and utility assistance, increasing the length of the paid absence program for childcare subsidies, extra support for the hospitality industry and investment into research and development in state research institutions. There is also a push for the state to support continuing education and reskilling programs, as well as promote events like job fairs to help those looking for new careers after being in the federal workforce.
Members also received updated presentations on the federal budget process. On March 15, 2025, President Trump signed House Resolution 1968 into law, funding the government until Sept. 30, 2025. The agreement carries forward most programs at FY24 funding levels. Wally Burnett, Senior Partner at Crossroads Strategies stated that it can be expected that the president’s FY26 budget request will be delivered in May. Chairman Cole of the House Committee on Appropriations and Chairwoman Collins of the Senate Appropriations Committee have signaled their intent to move forward with FY26 process in a timely manner. Increases in defense spending, border security, and immigration enforcement, as well as decreases to nutrition programs, climate programs, foreign aid and broader social safety net initiatives are to be expected. The committees also anticipate codification of current cuts and program cuts initiated by DOGE are also expected.
The House and Senate committees will meet again on May 12 and May 20 respectively.
