The federal shutdown, now on Day 26 and the longest ever, has cost Virginia $21 million in payroll taxes that are normally collected from federal workers’ paychecks.
Secretary of Finance Aubrey Layne told lawmakers Wednesday morning the state should be able to recoup that lost revenue if Congress and President Donald Trump agree on a bill to pay furloughed federal workers wages that are currently withheld.
If the shutdown stretches into a full financial quarter — 13 weeks — federal workers in Virginia will lose $1.6 billion in wages and the state will lose about $94 million in payroll taxes, according to Layne’s presentation.
Virginia has 177,996 federal workers and 64,378 of them are impacted by the shutdown. Not every federal department is shut down, since some are funded through their own revenue (like the U.S. Postal Service) or funded through separate spending bills (like many defense and military operations).
The state still doesn’t know the impact of payroll tax revenue from federal contractors who work for programs that have stopped operating, or impacts on public safety since the U.S. Coast Guard and Transportation Security Administration are working without pay.