Even as employers in Utah and Nevada are laying off employees in the wake of the election and its implications, here in Virginia we too are sitting under the gun of the 'Fiscal Cliff'. With a pro-business economic climate, a huge stake in the Defense Department, and a large rural population, the Commonwealth stands to lose in a big way if these crippling cuts are allowed to take effect.
The specific impact to Virginia? Well, if legislators allow it to pass, the numbers associated with the 'Fiscal Cliff' are staggering. Virginia alone could lose up to 270,000 jobs; a report from George Mason University predicts 207,000. The Defense Department would be cut by $110 Billion in total, payroll taxes would increase 2%, the list goes on and on.
Why Us? One third of Virginia's economy depends on federal spending, 20% on Defense spending. Northern Virginia is inextricably tied to federal contracting. Fairfax County is home to more federal contractors than any county in the nation, and 75% of all of Virginia's jobs that depend on federal spending are Northern Virginian. Fairfax itself is bracing to lose roughly 80,000 jobs.
Virginia is also hugely important to the military. Quantico, Langley, the Pentagon, Fort A.P. Hill and Norfolk Naval Base all lie within our borders. The active duty populations of those bases alone is roughly 128,000, and there are 22 more military bases in Virginia as well. Add the families supported by these installations, and the sweeping effects of these spending cuts and it is clear that Virginia military families would be devastated. Our veteran population is over 822,000, one of the highest in the nation.
So what are we doing about it? Governor McDonnell, and the General Assembly have been aware of this threat, and taken steps to soften the blow that Virginians could feel. Gov. McDonnell is working with state agencies to make an overall 4% cut to help weather the storm. Thanks to the Governor's policies of responsible spending and a healthy business community we have posted a surplus in each of the last 3 years, the most recent of which amounts to nearly $450 million. We have a $30 Million Federal Action Contingency Trust (FACT) to help bridge the budget divides that would emerge in the case that the cuts take effect.
While those efforts are admirable, and while Virginia is a healthy business state braced for the blow, the hit is still going to be significant. Our Governor and legislature have done what they can to help Virginians prepare. These tax hikes and spending cuts combined are looming over us, and they threaten the livelihood and the quality of life of hundreds of thousands of our friends, our families, and of our fellow Virginians.
VA GOP Caucus