McKay: Trump administration would devastate the local economy

A second Trump presidency could have a devastating effect on the Fairfax County economy, Board of Supervisors Chair Jeffrey McKay warns.

“We’ll be significantly targeted by a number of things he proposed,” including massive cuts to the federal government, McKay said in an interview with Annandale Today.

Federal contractors drive the economy

His biggest concern is the economic impact of a shrinking federal government on the contracting industry – and it’s not just about defense contractors.

According to McKay, 40 percent of all federal contracts awarded in Virginia come to companies in Fairfax County.

Federal contracting space is valued at $38 billion, including $21 billion from non-defense agencies and $17 billion from defense agencies, McKay said. It’s not known how many jobs those funds support.

“The office market in Fairfax County is already struggling,” he said. “Our commercial real estate sector can’t afford to take another hit.”

He vows to “fight back against any attacks on our local economy, on federal agencies, on national security, and contractors.”

A proposed shakeup of the federal workforce would not only affect the county’s tax base but would have a chilling impact on the talent base.

Trump proposes reviving Schedule F, which would strip civil service protections for 50,000 workers, allowing them to be dismissed without cause. “No one should be fired purely for political reasons,” McKay said. “That will imperil professionalism and independent thought.”

Trump also proposed big cuts to federal entitlement programs to pay for tax breaks, most of which will go to corporations and high earners.

Potential cuts in entitlement programs

“Fairfax County has a strong ecosystem with nonprofits and other providers assisting vulnerable people,” McKay said. “We’re better equipped to deal with this than many other parts of the county.”

Nevertheless, “it’s going to be an enormous challenge,” he said. He is most concerned about cuts to federal health and housing programs. Reduced funding for Medicaid would increase demand for the county’s free health clinics, and “cuts in federal housing vouchers could destabilize families and cause other economic challenges.”

“We have a very strong economy here; we also have people with tremendous needs,” he said. “There’s no way the county will be able to accommodate that with a flip of the switch.”

“We don’t have a way to absorb that type of hit if at the same time we’re getting hit by a loss of contracting and office space,” McKay said. “It’s a double-edged sword.”

“All of this will be part of the conversation for the next budget cycle,” he said. However, it’s too soon to predict what that means for the tax rate and potential cuts in services. “We won’t know the revenue situation in the county until early 2025.” The budget for the next year will be adopted next spring.

There’s been some speculation that the county’s need to increase revenue might spur construction of a casino in Tysons.

But McKay said he still opposes a casino, which is expected to come up again in the General Assembly – at least if the legislation doesn’t give the county control over the potential revenue.

Trump’s focus on deregulating technology – including artificial intelligence and cryptocurrency – could lead to a huge growth in data centers. McKay, however, doesn’t think that will have a big impact on Fairfax County.

“We have a very good zoning ordinance to protect communities against the growth of data centers,” he said. “If data centers do pour into the county, we have protections in place.”

Immigrants fill needed jobs

McKay also said the county has protections for undocumented immigrants, which Trump proposes to deport on a massive scale.

“We have a very good trust policy in place. We do not share people’s immigration status with law enforcement,” he said. “Having a policy like that is more important now than ever. We want people to feel comfortable talking to law enforcement.”

He hopes the Trump administration’s plan to deport undocumented immigrants “focuses on those who commit very heinous, dangerous crimes, not on people filling desperately needed jobs.”

Businesses’ biggest challenge is finding employees. There are 100,000 vacant jobs in the DMV.

McKay said, “Immigrants who are here – and not engaged in crimes that put communities at risk – are major contributors to our economic wellbeing.”  Undocumented immigrants pay some $700 million in state and local taxes a year.

He believes it’s important to have perspective. “We lived through four years of this administration before; we’re now better prepared to deal with this.”

However, he acknowledged, it will be much harder to fight back now that the Republicans hold both houses of Congress and conservatives have a majority on the Supreme Court.

“We have to assume Congress isn’t crazy enough to destabilize our government,” McKay said. “There are major national security implications that go beyond political parties. I suspect there will be significant pushback from highly experienced people who will realize some of the reckless things the administration is proposing will put the nation at risk.”

When it comes to Fairfax County, “we have to be careful not to overreact. We have to be sophisticated and strong, but we need to pick the right battles,” he said.

“What I hope my constituents keep in mind is that we don’t know what the future holds. We have to take this day by day.”