As VA General Assembly Considers Proposed Budget Compromise (Including $1.2B in New Revenues from Data Centers), Sen. Louise Lucas Declares, “We have heard the people and we are responding”

UPDATE 12:40 pm – The State Senate approved the conference report on a mostly party-line vote, 23-16. Now, on to the House of Delegates, where it’s basically guaranteed to pass on near-party-line vote as well…and then we’ll see what Gov. Abigail Spanberger does (signs? amends?).

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After the Virginia House of Delegates and State Senate this past Friday reached agreement on a new state budget, today the General Assembly is debating and voting on that budget agreement.  This morning, there was a staff presentation, briefing Senators on the details of the budget proposal. And now, the Senate is debating the deal, with passage basically guaranteed, the only question being by what margin. See below for VA Senate Finance and Appropriations Chair Louise Lucas’ introductory remarks to the debate, followed by other updates and video of the entire debate in the Senate. Keep in  mind that there’s a deadline of June 30 to have a budget, or there’s a risk of a Virginia government shutdown…something which has never happened before in Virginia’s modern history, so hopefully we won’t start this year!

• Sen. Louise Lucas: “Before us this morning, we have a budget that is great for the citizens of the Commonwealth. This conference report took longer than most, but the Senate conferees and I spent a lot of time trying to find the right balance between compromising with the House and the Governor and having something that made the data centers pay their fair share. This budget achieves that right balance and the Senate and House and the governor’s office all had input into this final project. However, let me be clear – I will still continue to look at this issue around data centers with our work group this year and I plan to continue my listening tours with the citizens across the Commonwealth of Virginia. Anyone that knows me understands that I stand with the people and work towards representing their interest. As data centers, they will pay an additional consumption fee that will provide $1.2 billion over to biennium. There’s also language in this budget that provides new protections and work around both noise pollution and water conservation. I already mentioned the work group and it will look at the sales exemption use issue over the course of this year and there’s also funding set aside to provide for additional environmental monitoring. We have heard the people and we are responding. This additional revenue allows us to fund and make progress in our core services. This conference report prioritizes affordability for our citizens and long-term structural balance. The conference report provides hardworking Virginians immediate relief. It exempts more income from state taxation by increasing the standard deduction and also provides a utility bill credit to Virginians. We’re also supporting families and children in the Commonwealth by funding additional public private child care slots increasing across the school breakfast and other services to meet the needs of students and supporting our special education students. In addition, we’re able to provide 4% raises each year for our teachers. For state employees and state-supported locals, we’re providing 3.5% raises each year. Other investment highlights include more than $60 million for housing initiatives, increasing personal care rates in Medicaid, $150 million for health insurance market subsidies, $60 million for grants for drinking water projects, additional investments for state police, and $175 million to maintain higher education accessibility and affordability at our public colleges. I still believe that aspiring expiring the data center sales and use tax exemption would be the best plan forward. However, this conference report provides an alternative path where data centers pay their fair share to support services for Virginia and ensure structural balance. I hope you will vote with me today on the budget. As I have said before and many times before, I hear and stand with the hardworking Virginians who demand a fair shake in this economy. I believe this budget provides that for the people of the Commonwealth. With that, Madam President, I move that the conference report be agreed.”

As Cindy/VAPLAN tweets, “Kudos to @SenLouiseLucas from her GOP colleague and budget conferee Sen Stuart: ‘The Chairman did a fantastic job…her fortitude, her tenacity, she stood behind me and fought WITH me to address this issue that protects people and their ability to have water to live on.'”

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See below for a press release from the VA State Senate Democrats…and note that, although they are technically accurate about the “bipartisan” nature of the vote on this budget, 16 out of 18 Republican Senators in attendance today voted no…while every Democratic Senator voted yes.

 Senate of Virginia Passes Bipartisan Budget that Includes Steps Toward Data Center Accountability

RICHMOND, V.A. – Today, the Senate of Virginia returned to Richmond for a special session to finalize and vote on the hard-fought 2026–2028 biennial budget, House Bill 30 (HB 30).

After months of deliberations and negotiations, the Senate passed a bipartisan budget agreement with support from both Democratic and Republican members. This budget passed with a 23 vote, reflecting the steadfast leadership of Senate Finance and Appropriations Chair Senator L. Louise Lucas, Senate finance conferees, and the dedication of the Virginia Senate Democratic Caucus. Their hard work has delivered meaningful investments for Virginians while ensuring major corporations, including data centers, pay their fair share.

We heard the concerns of Virginians across the Commonwealth loud and clear, and we’re proud that this budget takes meaningful steps to address them. A key component of the budget agreement includes the data center consumption tax exemption. The data center consumption tax exemption is projected to generate approximately $1.2 billion in additional revenue during the biennium. This represents an important step toward ensuring that the economic benefits of Virginia’s growth are reinvested in the communities and families that call the Commonwealth home.

Members of the Virginia Senate Democratic Caucus have released the following statement:

“Under the leadership of Senate Finance and Appropriations Chair Senator L. Louise Lucas, this budget ensures that data centers contribute more fairly to Virginia’s future. From housing and healthcare to education and economic development, we are confident that this budget makes meaningful investments and will strengthen communities across the Commonwealth.

Today’s bipartisan budget agreement reflects what Virginians have been asking for, a government that listens. A government that invests in their communities. One that holds powerful companies accountable. Throughout the budget negotiations, we’ve heard directly from constituents across the Commonwealth who demanded greater transparency and a budget that prioritizes working families. The Senate Democratic Caucus is proud to deliver on both.”

Next steps:

The House of Delegates is expected to vote on the budget later today. If passed, the budget will then make its way to the desk of Governor Abigail Spanberger. Governor Spanberger will have seven days to review the legislation and decide whether to sign it, propose amendments, or issue vetoes.

We will continue to provide updates as the budget moves through the final stages of the process.