Virginia gets more federal money than it pays in taxes
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Virginia gets more money from the federal government than it sends in taxes — more than nearly every other state, a recent analysis found.
Why it matters: The Trump administration's push for states to be more financially independent brushes up against the reality that Virginia significantly relies on federal dollars.
Between the lines: Virginia, however, is different from most states because it's "relatively high-income" and it's home to major government and military facilities, according to a 2024 Rockefeller Institute of Government report.
- The proximity to those agencies means "disproportionately high spending" on federal employees and government contractors.
- The result: Virginia receives more federal money than residents and businesses pay in taxes, which is called a positive balance of payment.
By the numbers: More specifically, for every person in Virginia, the state received $11,577 more in federal money than it paid in federal taxes in 2022 when discounting COVID relief spending, per the report.
- The only states with a higher per capita balance of payment are Maryland and New Mexico.
- Meanwhile, the U.S. average is $3,029.
The latest: President Trump last week ordered "large-scale" cuts to the federal workforce via an executive order.
- Virginia has about 145,000 federal employees — the third most in the U.S. — per a Congressional Research Service report from December.
- In 2023, over 40,000 federal workers were in Richmond.
- More than 75,000 are in Virginia Beach, which of course, is home to multiple naval bases.
What we're watching: The expected federal cuts, and its impact on people's jobs and Virginia's community health centers, is already seeping into this year's governor's race, reports the AP.
- Republican Lt. Gov. Winsome Earle-Sears described Trump's efforts as assessing where savings can be made.
- Democrat and former Congresswoman Abigail Spanberger has criticized the push for what it could do to Virginia's families and economy.
- Both, so far, are likely to go head to head in November's gubernatorial election.