Virginia sitting on a surplus as jobs erode

Downsizing the federal government is taking a toll on Washington, D.C. and Maryland, though Virginia’s Republican Gov. Glenn Youngkin is putting a positive spin on rising unemployment levels. 

“What we have seen is unemployment claims generally staying at a very normalized level,” said Youngkin. “Today, we have 250,000 open and available jobs, many of them in Northern Virginia, over 100,000 of them require a bachelor’s degree.”

In an address to the Virginia Senate and House Appropriations Committees earlier this month the governor cited state revenues coming in at higher than forecasted levels and a reserve fund of $4.7 billion. 

Youngkin admits the state has lost 11,200 jobs due to federal downsizing while tax collections are up by $572 million and general fund revenues grew by 6.1% as compared to last year. 

According to numbers collected by the Bureau of Labor Statistics, Virginia’s unemployment rate has gone up seven months in a row and sits at 3.6% for July. The commonwealth fell to No. 4 in CNBC’s poll of Top State for Business ranking. 

In the same poll, Virginia retains the No. 1 position for education and is ranked second for infrastructure. The American Society of Civil Engineers awarded the state a “C” on its Infrastructure Report Card in 2022. 

The Weldon Cooper Center for Public Service at the University of Virginia sees trouble on the horizon regarding Virginia’s economic future. Its most recent quarterly forecast indicates that Virginia’s GDP will remain in positive territory, but growth will slow. 

That report indicates that 780,000 jobs were added in 2025, which is lower than recent years. The center is predicting 200,000 jobs will be added in 2026 and that employment will increase by only .4% by 2027. 

In May Fitch Ratings “affirmed the commonwealth’s ‘AAA’ long-term Issuer Default Rating and the ‘AAA’ ratings on the commonwealth’s outstanding GO bonds, as well as the ‘AA+’ ratings on the commonwealth’s various annual appropriation-backed securities and other debts directly linked to the IDR.” The outlook is stable. 

Moody’s Ratings maintains Aaa ratings on approximately $1.1 billion of Virginia’s general obligation bonds outstanding at the end of fiscal 2024 with a stable outlook.   

S&P Global Ratings affirmed its ‘AAA’ long-term rating on the Virginia’s GO debt outstanding, an ‘AA+’ rating on the commonwealth’s appropriation-backed debt, and an ‘AA’ rating on its moral obligation debt. The outlook is stable.

The Fairfax County School Board is looking for the approval from county supervisors to ask voters in November to approve a $460 million school bond referendum to shore up its Capital Improvement Plan and pay for renovations at elementary and grade schools.

Fairfax is the most populous jurisdiction in the Washington, D.C. metropolitan area. The county is home to a handful of federal agencies including the Central Intelligence Agency. 

Youngkin is a Trump supporter and has been tagged as a possible Republican presidential candidate for 2028 after speaking at the Iowa Republican Party’s annual Lincoln Dinner, which is considered a must-do for anyone running.