Two regional planning experts delivered sobering news to the Alexandria City Council on Tuesday (March 25) about the potential impact of federal workforce reductions, warning that the city faces significant economic challenges if proposed cuts materialize.
Clark Mercer, Executive Director of the Metropolitan Washington Council of Governments (COG), and Jill Kaneff, Senior Regional Demographer for the Northern Virginia Regional Commission (NVRC), presented data showing Alexandria’s vulnerability to federal job cuts.
“In Alexandria, 20% of the workforce are full-time federal employees,” Mercer told the council, highlighting the city’s dependence on federal employment.
Kaneff’s data shows that approximately 17% of Alexandria residents work for the federal government, significantly higher than the Northern Virginia average of 12.5%.
The presentations came as the city prepares its budget amid uncertainty about federal employment levels and their ripple effects on the regional economy.
Mercer explained that while nationwide federal employment has remained relatively stable over decades, proposals to reduce the federal workforce by up to 75% would devastate the region’s economy.
“If that were to be accomplished, the unemployment rate in this region would be higher than at the height of COVID, 9.6%,” Mercer says. “That is not taking into account any federal contractors who lose their jobs, nor is it taking into account the multiplier effect.”
The experts outline three main ways federal employees are being affected: buyouts, termination of probationary employees, and formal reduction-in-force plans that agencies submitted to the White House.
The impact extends beyond direct federal employment. According to Mercer, the Northern Virginia Chamber of Commerce reports that 70% of all hospitality business in Northern Virginia is tied to the federal government.
“The Restaurant Association of Washington released their survey, which 40% of their members anticipate going out of business in 2025,” Mercer says, noting that a 10% reduction in the federal workforce would result in a $300 million hit to the restaurant industry.
Kaneff explains that NVRC is tracking unemployment claims, though the data shows few federal claims so far. This delay occurs because federal employees must exhaust all income from their employer before applying, and many termination notices cite performance issues that could disqualify workers from benefits.
“Many of the emails that are being sent to federal employees cite their performance as cause,” Mercer explained. “That is clearly establishing cause. And there has not been a clear statement from the White House that they will pay for unemployment benefits.”
The experts also highlight concerns about the mismatch between the skills of laid-off federal workers and available jobs. George Mason University research suggests only about 30% of those being let go would be able to find comparable employment.
“Five weeks ago there were 92,000 open jobs in Northern Virginia listed. That number last week was 45,000 jobs,” Mercer said, indicating that many potential landing spots for federal workers are disappearing.
Council members expressed particular concern about the health impacts on residents who lose jobs and health insurance. Councilman Aguirre noted that while food and housing needs might be addressed through emergency measures, healthcare presents a more difficult challenge.
“When you lose your job, you’re losing your health benefits, you might be able to sign up for COBRA. But COBRA is extremely, extremely expensive and it’s not something that any single jurisdiction will be able to handle by themselves,” Aguirre said.
Mayor Gaskins asked about coordination between jurisdictions as they make budget cuts, noting that if multiple localities reduce funding for the same services, regional problems could worsen.
“Different jurisdictions are going to be making cuts to different areas and we need some way of sharing that,” Gaskins said. “How are we all sharing where we’re making cuts? What changes are happening to our safety net so that we can coordinate better regionally?”
The presentations also highlighted concerns about federal funding cuts to programs like Medicaid, SNAP benefits, and housing assistance that could further strain local budgets.
Mercer warns that Virginia’s Medicaid expansion, which covers 630,000 Virginians, could be eliminated if federal funding drops even 1% below the current 90% level.
Both COG and NVRC maintain websites tracking federal workforce data and economic indicators to help local governments plan for potential impacts. The Northern Virginia Economic Development Alliance is also conducting a study on tax revenue impacts, with results expected by May 15.
City Manager Jim Parajon noted that Alexandria is planning an Economic Development Summit on May 8, with a pre-event survey already available in multiple languages to gather community input on economic priorities.
The two presentations are included below;
