The goose, of course, is the federal government, which provides hundreds of thousands of jobs in the Old Dominion. The state is chock-a-block with such jobs from CIA headquarters at Langley to the Oceana Naval Air Station in Virginia Beach. Virginia ranks No. 3, after the District and Alaska, in the percentage of workers who get their paychecks from government, according to Gallup.
An that’s just direct employment. The state also is the No. 2 defense contractor, after California. Of the state’s 15 largest employers, 10 are directly related to defense spending, such as Newport News Shipbuilding, which has 19,000 workers and is the only shipyard in the country capable of building nuclear-powered surface vessels. Federal payrolls are a major reason why the state’s unemployment rate is a relatively modest 6.1 percent.
McDonnell, however, must toe the popular budget-cutting line to stay in tune with other prominent Virginia Republicans, such as House Majority Leader Eric Cantor, who has suddenly transformed himself into a budget hawk. “The governor does believe we must cut spending in Washington, D.C., and we need to do it in a significant and serious manner,” McDonnell spokesman J. Martin Tucker told me, adding that McDonnell knows that such cuts could “have a significant impact” on the state.
To ease the pain, though, McDonnell is proposing putting $30 million from his upcoming budget “surplus” into a special fund, called the Federal Action Contingency Trust Fund, that could be used to replace some of the lost state tax revenue if federal jobs take hits. Another step is to expand the work of “Jobs Guy” Lt. Gov. Bill Bolling and his employment commission to create even more jobs to make up for federal cuts.
McDonnell’s proactive move has won accolades from Moody’s Investor Service, a credit rating agency. A Moody’s analyst wrote that the fund would be a “credit positive” for the state, which is in danger of losing its AAA credit rating because of its dependence on federal jobs. The fund would tend to help Virginia keep its excellent rating. Another ratings agency, Standard & Poor’s, has downgraded the U.S. government’s rating because of budget flaps.
Reality, though, is a bit more problematic. For one thing, $30 million is chicken feed on this issue. It’s pin money relative to an $80 billion budget and a $545 million surplus — a point even McDonnell acknowledges. Second, there are serious questions about how successful McDonnell has actually been at creating jobs.
The McDonnell administration said it has created 45,600 net jobs since it took office in 2010. But Brian Coy, Democratic Party spokesman, has said that when population growth is factored in, the percentage of Virginia’s working population employed, 64.3 percent, is about the same when McDonnell took office. Also problematic is the fact that the state lost 14,600 jobs in June, according to the U.S. Labor Department, and 47,800 jobs in July, according to the Virginia Employment Commission.
Such data tripwires make McDonnell’s job growth claims appear to be more modest than he wants you to believe. Even if the administration’s claims are true that it saw an overall increase of 53,784 jobs since it took office, that’s far shy of the nearly 1 million jobs directly related to government work in the state, using figures from the Gallup Poll, as well as those of private contractors under government contract that could be cut, especially in defense.
The bitter truth is that if the budget hawks get their way, Virginia is in for a much rougher time and will be a much tougher place to live in than any politician is willing to admit.