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The major industry in a company town starts downsizing in a major way. The community is thrown into turmoil and fears the local economy will be devastated. It turns to the state government for help.
That scenario — playing out right now in Northern Virginia with President Donald Trump’s mass firings of federal workers — prompted two days’ worth of debate last week in Richmond in the closing days of the General Assembly.
The issue at hand was whether Virginia should extend unemployment benefits to federal contractors. Ultimately, after impassioned debate that split along both partisan and regional lines, plus a good deal of parliamentary wrangling, the state Senate decided Thursday to adopt the measure. It then went to the House of Delegates, where the provision appears to have mysteriously died, although sometimes certain things in the legislature rise from the dead just like vampires. Any resurrection will have to come soon. The legislature is set to adjourn Saturday. However, Senate Majority Leader Scott Surovell, D-Fairfax County, believes a special session will be necessary for Virginia to readjust its budget in light of Trump’s federal government cuts and has warned that the issue might come up again there. So this question may drag on awhile.
For some of us with long memories, this question of how to react to a community suffering economic upheaval is nothing new. A quarter-century ago, the legislature dealt with a similar situation — in Martinsville and Henry County. The issue then wasn’t federal contractors but factory workers.
I’ll tell the tale, and how it relates to today, but here’s the key thing: They didn’t get any special treatment, despite impassioned entreaties from the Martinsville-Henry County legislators at the time.
Martinsville was once an industrial powerhouse that produced some of the state’s leaders. All that came crashing down in the late 1990s with the collapse of the furniture and textile industries. The headliner came when Tultex, a hometown company, filed for Chapter 11 bankruptcy, shutting down six plants and eliminating 2,600 jobs — about 1,100 of those in Martinsville.
That was December 1999. The unemployment rate shot up to 19.3% “literally overnight,” recalls Ward Armstrong, a Martinsville lawyer who then represented the community in the House of Delegates.
Virginia’s unemployment rate at the time: just 2.7%.
The state was doing great. Martinsville was facing an unemployment rate almost twice what the state had seen during the Great Depression.
In response, Armstrong and the region’s state senator, Roscoe Reynolds, put together a bill they called the Textile Workers Relief Act of 2000. That legislation set out to raise unemployment benefits in regions where unemployment topped 10% and provide temporary health insurance to workers who lost their jobs in any cuts deemed related to the North American Free Trade Agreement. The bill would have done a lot of other things, but “the two biggies were raising the unemployment benefits and the health insurance piece,” Armstrong says.
Republican Gov. Jim Gilmore opposed the measure, saying it wasn’t right to give one part of the state special benefits.
The politics of Virginia were quite different then. Armstrong and Reynolds were Democrats from a time when rural areas still elected Democrats. Most legislators from Northern Virginia were Republicans. Republicans held a slim majority in the House of Delegates and had a functional majority in the state Senate — the chamber was tied, but the tie-breaking lieutenant governor was a Republican. Now it’s Democrats who hold slim majorities in each chamber, although the governor is still a Republican, just not the same one.
In 2000, Armstrong and Reynolds were able to turn a local crisis in Martinsville and Henry County into a statewide commotion. Whenever their bills were scheduled to come up in committee, “we filled the damn room up for it,” Armstrong says. “We bused people down for every committee meeting.”
In the end, none of that worked. Both bills died in committee on close votes. While there were some defections, generally Republicans opposed the proposal while Democrats backed it. Here’s how Armstrong remembers it: “For many years, Southside was the economic engine that powered the state with textiles and tobacco — and now here we are. Wouldn’t you want to help your neighbor in a time of need?” The problem: “Most people didn’t want to buck Jim Gilmore.”
He and Reynolds weren’t done, though. They managed to get some money for out-of-work textile workers included in the state budget, which passed. Gilmore used his line-item veto to X it out.
Now, 25 years later, the same issue has come up again, broadly speaking, at least. The proposal that stirred controversy this year was whether unemployment benefits should be extended to federal contractors.
The argument for: They are as dependent on the federal government as actual employees, so if a lot of them lose contracts, that will spike unemployment in Northern Virginia even more.
The argument against: These are contractors, not employees. They’re independent businesses who might be losing a contract. That’s no different than any other business that loses a client; the state doesn’t help those.
All this produced a passionate, and at times colorful, debate. State Sen. Bill Stanley, R-Franklin County, suggested that independent contractors simply find other work “instead of attaching yourself like a carbuncle to the government function.”
“These people are living off these big fat contracts,” said state Sen. Tammy Mulchi, R-Mecklenburg County. If they don’t have a backup plan for losing a contract, “that’s piss-poor planning.”
State Sen. Danica Roem, D-Manassas, quoted verbatim one of my columns about how Northern Virginia is the state’s economic engine.
State Sen. Travis Hackworth, R-Tazewell County, countered that “we have been going through this in Southwest Virginia for decades. When the Clean Economy Act passed here in Virginia, that impacted Southwest Virginia. There were independent contractors who lost their jobs with that and we didn’t ask taxpayers to pick up the tab on that.”
State Sen. Aaron Rouse, D-Virginia Beach, said that Virginians should look out for one another, no matter where they live.
State Sen. Mark Obenshain, R-Rockingham County, wondered why that didn’t apply when Rouse led the charge to kill a routine bill to preserve Warren County’s access to an industrial development authority — because he was upset about Democrats failing to back a Virginia Beach charter change he wanted and so looked for the next Republican-sponsored bill to kill to make a point. (See my column on that.)
Senate Majority Leader Scott Surovell, D-Fairfax County, called Elon Musk “a lunatic.”
Stanley joked that the Democratic arguments consisted of “Orange Man — bad!”
State Sen. Mark Peake, R-Lynchburg, asked whether this was all a political ploy by Democrats to try to get Republicans on record appearing to vote against the interest of Virginia workers (especially since there’s no money in the budget to actually fund this measure).
Surovell said the money could be added in the special session he foresees.
Some of these arguments aren’t wrong. You can decide for yourself how you feel about Trump and Musk, but Roem is factually correct when she says that Northern Virginia is the state’s economic engine and that schools in rural Virginia are subsidized by income tax revenues from that part of the state. Hackworth is also factually correct when he says that laws phasing out fossil fuels have been bad for the Southwest Virginia economy — and nobody has offered any extra benefits when unemployment has shot up there.
What fascinates me is how much things have changed and how much they haven’t.
In that General Assembly back in 2000, it was Democrats who backed the extra benefits for former textile workers in Martinsville and Henry County, while virtually all Republicans opposed that. This year, it was Democrats who pushed the benefits for out-of-work federal contractors and Republicans who were the most skeptical (until Senate Republicans decided it might be in their political interests to support the bill and see if House Democrats would really pass it).
That’s the standard way to compare these two events across a quarter-century. There’s another way to look at them, though. That’s this: In 2000, it was a small industrial city in Southside that faced economic calamity, but when Martinsville’s legislators asked for help the legislators from the state’s urban areas said no. In 2025, it’s the largest state’s metro that’s looking at an economic trauma, while legislators from rural areas are the ones wondering why they should help.
Which of those two ways is the way we should view this particular debate? The former fits the usual paradigm of Democrats being generous with spending and Republicans being parsimonious with taxpayer dollars. However, the latter also fits the paradigm of small communities getting ignored while bigger ones get attention.
Armstrong’s observation from afar: “Northern Virginia has about 30 legislators.” Back in 2000, “it was just me and Roscoe.”
Join us for a conversation with top legislators
Join us Thursday, Feb. 27, at Fitzpatrick Hall in Roanoke for the second annual Cardinal Way: Civility Rules luncheon with the top leaders of the Virginia General Assembly.
Hear from top Republican and Democratic House and Senate leaders as they discuss the issues on which they found consensus and those in which they remain far apart. They’ll also leave time to answer your questions.
Cardinal Way: Civility Rules is a project partially funded by a civil discourse grant from the American Press Institute. This event is also sponsored by Gentry Locke Consulting. Tickets are available here.
