Recent actions by the Trump administration are heightening the urgency of the Fairfax County and the D.C. area’s longtime goal of reducing their reliance on federal government employment and spending.
With mass worker layoffs, contract cancellations and potential real estate sales promising significant economic upheaval, local and regional leaders may have no choice but to “think and act differently,” according to Northern Virginia Chamber of Commerce President and CEO Julie Coons.
“We cannot afford to take a wait-and-see approach,” Coons told the Fairfax County Board of Supervisors yesterday (Tuesday) at a meeting of its economic initiatives committee.
The 90-minute discussion, which supervisors said will be the first of many, came as county and regional leaders were trying to grasp the full impact of the Trump administration’s downsizing efforts.
According to the Bureau of Labor Statistics’ most recent employment report, the federal government eliminated 10,000 jobs nationwide in February, but many changes may not show up in reported data until this fall, according to the U.S. News and World Report.
At least one firm that tracks layoffs recorded 62,242 in February by the federal government, which led all sectors in a month that saw the most job cuts across the board since the height of Covid-induced shutdowns in July 2020.
With unemployment data typically lagging by weeks or months, local officials have been forced to rely on anecdotal evidence to determine how many of the roughly 175,000 federal workers residing in Northern Virginia — about 79,000 of them in Fairfax County — and thousands more private contractors already have been affected.
“The data has just not shown up yet,” Jill Kaneff, a senior demographer at the Northern Virginia Regional Commission, said, anticipating that it may be “a month or two before we actually see what’s happening.”
The data “will take time to unravel,” added Stephen Tarditi, director of market intelligence for the Fairfax County Economic Development Authority (FCEDA).
Beyond employment, the future of federal grants and other funding remains a question mark. The federal government also leases approximately 4.3 million square feet of office space in Fairfax County — about 3% of the county’s total — plus additional warehouse and ancillary space.
According to data shared by the FCEDA, the federal government has canceled more than 4,000 contracts nationally, including 106 in Northern Virginia that have affected 82 contractors, as of Feb. 27. In Fairfax County, cancellations have come from 18 different agencies, led by the interior and agriculture departments.
In addition, the General Services Administration, which handles contracts and real estate for the federal government, has canceled at least 725 leases and shed over 9.5 million square feet of space, as of March 4. Local cuts have included 15,000 square feet in Lorton and 4,500 square feet in Herndon.
A trickle-down impact on the regional economy and Fairfax County’s proposed $5.7 billion budget is sure to follow, Board Chairman Jeff McKay said, predicting that retail businesses, restaurants and other aspects of the discretionary spending economy are about to take a hit.
“The total economic impact … is almost impossible to measure,” McKay said. “We’re going to have to be creative and move people to other jobs, if they are there, as soon as possible.”
He envisioned that, shortly, Northern Virginia would be a place where “people aren’t spending as much money, because they don’t have it.”
At the March 11 committee meeting, McKay again pressed for more aggressive action from Virginia Gov. Glenn Youngkin. The county’s Democratic supervisors have already urged the governor to speak out against the job cuts and potential federal agency relocations.
Youngkin, who has expressed support for the downsizing, launched a statewide jobs portal last month, and the Virginia Employment Commission has compiled additional resources for affected federal workers.
A resource hub for federal workers created by Fairfax County has become one of the five most-viewed webpages on the county’s website, trailing only the homepage, library and search, Office of Public Affairs Director Tony Castrilli reported.
The statewide implications of an economically wounded Northern Virginia could be profound, McKay said.
“If Northern Virginia’s economy is struggling, the state is doomed,” he said, noting that the pain will also be felt in rural areas of the Commonwealth supported by Fairfax County residents through state taxes.
Northern Virginia Regional Commission Executive Director Bob Lazaro agreed.
“This is a statewide issue,” he said. “It really needs to be elevated.”
A number of speakers voiced concern that those laid off or otherwise affected are opting to leave the region for less expensive areas of the country. That could exacerbate challenges in the housing market, among other repercussions.
“People are literally under siege,” McKay said. “My fear is a lot of people … are going to decide they’ve got to move to a more affordable market. We’ve got to be real about that.”
According to Victor Hoskins, who heads the FCEDA, online job listings in the local region are down 50% from last year, a steeper decline than what’s being reported nationally. On the plus side, former federal workers bring a wealth of experience that private sector employers would covet, he said.
“There is a lot of talent that is coming out of the federal government,” he said.
“We have undeniable strengths,” Coons agreed, adding that by thinking “creatively and collaboratively,” the region can ensure its long-term prosperity.
Given their limited influence on decisions being made at the federal level, regional leaders will have to do the best they can with tools at their disposal, Hunter Mill District Supervisor Walter Alcorn said.
“We can adapt and have to adapt,” he said. “We really have no choice.”
Supervisors may call for expanded unemployment benefits
One tactic that Fairfax supervisors may pursue next week is to advocate for the Youngkin administration to devote state funding to an expansion of unemployment payments to those laid off from the federal workforce and others impacted by the downsizing.
Youngkin reported last month that the state’s general fund revenues remain on track for a $2.1 billion surplus over the current budget adopted last May. The General Assembly passed amendments to the budget before adjourning on Feb. 22 that the governor must approve or veto by March 24, or else the existing spending plan will remain in place.
“I can’t think of any better use of [the surplus] right now,” said Braddock District Supervisor James Walkinshaw, who chairs the board’s legislative committee.
Walkinshaw said he will ask his colleagues to approve a letter to the governor at the board’s meeting next Tuesday, March 18.
Additional state unemployment benefits would help “keep people afloat, keep people spending money,” he said.
Currently, unemployed Virginians are eligible to receive payments ranging from $60 to $378 per week for up to 26 weeks.
Walkinshaw’s proposal takes as its inspiration the Federal Pandemic Unemployment Compensation program, which augmented state unemployment payments with weekly supplements of $600 (later downscaled to $300) for up to 39 weeks. However, unlike during Covid, Coons predicted “there will be no federal dollars to help” local and state safety-net efforts.
Democrats on the Board of Supervisors have already written to the governor twice this year, asking him to make the region’s case to President Donald Trump. In the case of extending unemployment benefits, there would also need to be buy-in from the legislature, which is currently set to return to Richmond on April 2 to wrap up the 2025 session.
