Weldon Cooper: 10% federal workforce cut could cost Virginia about 40,000 jobs and $250 million in tax revenue

Eric Scorsone, executive director of the Weldon Cooper Center for Public Service at the University of Virginia, presented preliminary modeling for the committee showing economic and revenue scenarios tied to federal civilian employment reductions.

Scorsone said his center estimated that a 10% reduction in federal workforce could translate to roughly a 40,000 net job loss in Virginia and an initial estimate of about $250 million in lost state tax revenue. He added that a 10% reduction in the federal civilian workforce would be associated with about a $6 billion decline in state output in the center's early runs.

Scorsone cautioned that these forecasts are preliminary and rely on multiple macroeconomic assumptions; his team is producing quarterly forecasts and planned an April update to incorporate more recent federal actions. He noted that analysis should factor in both employees who live in Virginia but work in DC or Maryland and the broader contractor and professional services sectors that depend on government contracting.

The center proposed delivering repeated scenario updates to the committee and working with state agencies to reconcile differing federal employment counts. Scorsone said the center could rapidly produce further runs if the committee and staff agreed on consistent scenarios (for example, 1%, 5% and 10% workforce reduction and an 8% DoD-specific scenario).