Several Hampton Roads cities have presented proposed spending plans for next fiscal year, and none to date include any preemptive cuts in anticipation of federal funding reductions.
But city leaders say they are continuing to monitor any potential impacts that may trickle down to local government. Five Hampton Roads cities introduced their budgets last week. Some cities, like Newport News, have introduced more conservative spending plans as a precaution.
At the state level, Gov. Glenn Youngkin also has proposed some financial restraint. In a slate of more than 200 budget amendments the Republican governor introduced last week, he suggested setting aside $300 million to the state’s rainy day fund, which would bring the total to about $5 billion.
Youngkin said the state economy is thriving despite cuts to federal funding and workforce, which he categorized as painful but necessary.
“Virginia is strong and Virginia is ready,” he said.
However, local economists have warned Trump administration policy changes, including federal workforce cuts and the impact of tariffs on imports at the Port of Virginia, could be a drag on the local economy.
A coalition of seven local business and government groups recently wrote to Hampton Roads federal representatives to express concern some of the administration’s policies “may uniquely and adversely affect the economic growth of the region.” President Donald Trump has previously said he wants to claw back federal funding allocated through the Inflation Reduction Act or the Bipartisan Infrastructure Law.
The organizations, which include the Hampton Roads Alliance and Hampton Roads Workforce Council, noted the region has received at least $1 billion in awards from BIL and $600 million from the IRA over the past three years.
“These awards are helping build and repair our airports, our regional transit system, and our roads, and we ask that you protect these federal investments in our region, ensuring that awards, contractually signed and obligated, are honored and delivered,” the organizations wrote.
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Chesapeake
City Manager Chris Price presented a $1.65 billion proposed fiscal budget last week, which he said doesn’t supplant losses from state or federal funds with local funds. Price said the city is monitoring the status of federal funding cuts and that he’ll alert council of any impacts.
“But as of this moment, there is no impact to the city,” Price said. “But if we were to have a reduction in grant funding, we will bring you all options and choices to be able to purposefully address any potential losses.”
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Newport News
The $1.2 billion budget proposal is a slight increase from this year, mostly due to increased real estate assessments and leftover money from conservative previous budgets, according to city officials.
While the proposed budget includes roughly $5.2 million in federal and state grant revenue for general operations, City Manager Alan Archer said uncertain federal funding makes this budget, including any creation of new programs, more reliant on local funding.
“We’re in an unprecedented environment of uncertainty with the changing federal funding landscape,” Archer said. “This means that all aspects of the recommended budget, from filling positions, proposed salary adjustments and initiating new programs, will move forward in a conservative manner, living within the revenues that we generate.”
Mayor Phillip Jones said the proposed budget focuses on sustainable investments that work toward improving the city regardless of any potential funding cuts from the Trump administration.
“It is a fluid situation, but the main priority is to ensure that we minimize any disruptions to essential services,” Jones said. “So whether it’s state or federal level, whatever happens in the future, we’re going to ensure that we can continue to maximize all of our services.”
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Norfolk
The proposed $1.6 billion fiscal budget includes about $141 million in federal, state and other grant funds, as well as matching city funds, according to budget documents. While uncertainty in federal spending did not tangibly affect the proposed budget, it’s still a major question mark officials will keep an eye on, City Manager Pat Roberts said.
“It’s just going into the budget development knowing that those things could change and force us to change our assumptions,” he said.
Along with federal spending itself, Roberts said the situation in Washington could impact economic factors such as property values or imports and exports at the Port of Virginia, which could in turn affect the budget.
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Portsmouth
A proposed $873.5 million operating budget includes all funding sources, though leaders say they’re monitoring any potential impacts.
“For now, we are proceeding with our budget using all funding sources,” said spokesperson Peter Glagola on behalf of City Manager Steven Carter.
City Council member Yolanda Thomas said she and other council members recently added the National League of Cities conference in Washington, where they met with federal legislators to advocate for and discuss issues directly affecting the city, such as federal funding and the ability to generate more tax revenue in a city with limited land available to tax.
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Virginia Beach
Budget officials estimate state and federal revenues based on historical trends, General Assembly budget proposals, the governor’s recommendations and congressional action.
But they included a caveat in the $2.8 billion proposed fiscal budget, which states: “State and federal budgetary timelines that do not align with the local fiscal cycle, as well as partisan activities that prolong budgetary processes, may impact the consistency of programmed support from year to year.”
The majority of the revenue from state and federal sources are earmarked for school funding, human services or housing assistance. The budget anticipates $169 million in federal revenue.
“As always, the City will monitor the decisions of the Federal Government and will make adjustments if necessary,” the operating budget states.
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State pressure
When federal grant funding for Virginia has been paused, Youngkin said he successfully worked with the Trump administration to turn it back on.
“One of the things I do believe is picking up the phone and calling people, and there’s been some circumstances where we felt like there was a pause (in funding), and I just wanted to make sure that the administration understood the facts around whatever the grant was or the appropriation was that had been paused,” he said.
“What has been really encouraging is the responsiveness out of the administration.”
Youngkin cited a return in funding to federally qualified health clinics, which was frozen, then unfrozen in February.
“We worked hard for them to understand that in our rural communities, particularly, they are really important to our rural health care,” he said. “They worked with us and some other states and reinstated that funding.”
Youngkin added he worked with the administration to ensure the current operating contract at Jefferson Lab would be continued while a contract is rebid. The Department of Energy initially announced the search for a new contract was canceled, a move that without action would have forced the lab to close when the contract expired in May. The department has since confirmed the existing contract with Southern Universities Research Association would be continued through May of 2026.
Staff reporters Natalie Anderson, Kate Seltzer, Devlin Epding, Trevor Metcalfe and Stacy Parker contributed to this report.
