Va. Employment Commission Cuts Back

Fairfax Office Closing as Jobless Claims Rise; Work Goes to Alexandria, Woodbridge

The Virginia agency charged with processing unemployment claims is retrenching just as workers are beginning to feel the pinch of the economic slowdown.

The Virginia Employment Commission said yesterday that it plans to close its Fairfax office and relocate 45 positions in offices around the state to save an estimated $1 million on building and operating costs.

The announcement comes after the commission last month eliminated 243 staff positions, which included laying off 157 workers.

The cuts and relocations come at a time when economists say Virginia's unemployment rate is likely to increase as the U.S. economy weathers a downturn that is spreading beyond the housing market.

"Like the rest of the nation, the Virginia unemployment rate will inch up and employment growth will slow significantly from 2007," said Christine Chmura, chief economist for Chmura Economics & Analytics in Richmond. "With the overall U.S. economy slowing, the cuts in the Virginia state government are not coming at a good time."

A total of 16 positions will be moved from the commission's Fairfax office in Chantilly to sites in Alexandria and Woodbridge in Prince William County.

The commission is making the cuts because it is receiving less federal funding. The employment commission's $56.7 million budget consists entirely of Federal Unemployment Tax Act dollars that Virginia employers pay to the federal government.

The U.S. Department of Labor funnels the money back to states on a percentage basis based on a formula that takes into account demographics, level of unemployment and other factors. Virginia receives the second-lowest percentage of these federal dollars of all U.S. states, collecting 27.6 percent of every dollar that Virginia employers pay the federal government.

The commission began its fiscal year estimating a deficit of as much as $26 million, said Joyce G. Fogg, a spokeswoman for the commission. The measures adopted yesterday, taken with the cuts made last month, will close that gap, she said. Three years ago the federal contribution equaled 32.8 percent, Fogg noted.

Virginia Gov. Timothy M. Kaine (D) has been lobbying Virginia's congressional delegation to try to increase the percentage of tax dollars returned to the state.

In addition to closing its Fairfax office, the commission plans to move an office serving the Richmond area to the offices of Goodwill of Central Virginia. The state's Buena Vista office will be closed, and the commission's Suffolk office will be relocated.

The state chose to shutter the Fairfax office because the county's unemployment rate was so low, Fogg said.

Fairfax had a 2.7 percent unemployment rate in January, compared with an overall state rate of 3.8 percent. The number of new unemployment claims in Northern Virginia, however, the epicenter of the state's housing bust, rose 21 percent in January compared with a year earlier. The commission recorded 4,982 new claims in January, compared with 4,106 in January of 2007.