So as you can see, from the following tweets by VA Senate Appropriations/Finance Committee Chair Louise Lucas and VA Senate Majority Leader Scott Surovell, it’s not looking great at the moment for the State Senate, House of Delegates and Gov. Abigail Spanberger to reach agreement on a new, two-year budget by the end of this month, which is the fiscal deadline to get this done (or not, potentially leading to a partial government shutdown starting July 1).
Currently, the plan is for the House of Delegates to reconvene on June 18, followed by the State Senate on June 22, with the major point of contention being whether or not to keep tax breaks for data centers going, to scale them back, phase them out, ditch them, whatever. And as of June 2, Sen. Lucas was sounding positive, tweeting at that point, “The good news is that we’re getting close to an agreement on how to pay for core services. We will have a budget before June 30th and you can take that to the bank!” Well now, based on Sen. Lucas’ and Sen. Surovell’s comments today, maybe the “take that to the bank” prediction has now been superceded? Because, according to Sen. Lucas:
“Just when I thought Chairman Torian and I were getting close to agreeing on a budget, we had a meeting with Data Center Diva this morning and she agrees with Amazon Don who doesn’t want to impact the richest corporations in the country.
Amazon Don and Data Center Diva, you are making a MONUMENTAL MISTAKE! Maybe you should ask Glenn Youngkin how that worked out for him!
House conferees have gone home but Senate conferees are still meeting. We are the ones working for teacher raises, access to healthcare, and making sure data centers pay their fair share.
Let me be clear—I came up with several compromises to get us out of this mess! These compromises didn’t give me everything. But Data Center Diva and Amazon Don couldn’t understand that this is about the policy—fair taxation and protecting our resources and citizens.”
So we’ll see what happens, although in the end, I’d be shocked if Democrats – who hold a “trifecta” (governorship, House of Delegates and State Senate majorities) – allow the government to shut down, even partially; instead, I’d assume they’ll reach *some* sort of deal to at least keep the government running, even if it’s just a “continuing resolution” or whatever.
With that, I’ve got a few more thoughts on all of this:
- First of all, Democrats hold a governing trifecta and need to get stuff done, demonstrate that they can run a tight ship (or at least one that can stay afloat and make forward headway in the water), act as a team (even if they intensely dislike each other), etc.
- Second, I’m not sure that having these debates on social media – let alone a site owned by a white supremacist, fascist, etc. (Elon Musk) – is the optimal way to move the football down the field. On the other hand, it’s not surprising that frustrations are leaking out publicly, given that relations between some of these leaders aren’t great (from what I hear, Gov. Spanberger is barely if at all even speaking with top VA State Senate leaders…and hasn’t been for months). So something’s definitely going to have to give; preferably, some real, sincere, honest dialogue, compromise, comunication, mutual respect, etc? I know, what a concept! LOL
- Third, with regard to data centers, in the end Sen. Mark Warner’s probably right: “it’s frankly better to put it at a federal level because then that can apply to data centers all across the country. If states want to put other incentives or other barriers in that would be up to them. But doing this at the federal level I think is the right way to approach it.” The problem, though, is that Congress has been waaaayyyy behind on regulating any of this stuff – the internet, social media, AI, data centers, etc – and there’s no particular sign that it’s going to be making up for lost time, certainly not with Republicans in charge of Congress and with Trump in the White House. Which leaves it to the states…and so far here in Virginia, the results (or lack thereof!) have not exactly been inspiring.
- The politics of data centers are clear – voters HATE THEM, with only 23% of Democrats favoring them versus 75% who oppose them. So you definitely don’t want to be seen as on the side of data centers, at least from a political perspective…
- From a policy perspective, of course, the fact is that there are a TON of problems/challenges with data centers – massive power and water usage, for instance (and no, they are *not* going to be powered by nuclear fusion, which is probably decades away if ever, or “small modular” nuclear reactors, which still have a long way to go on technology, cost, etc.) – and those problems need to be addressed, urgently, or it’s hard to see how a huge number of these things are going to be able to come online in the next few years.
- At the same time, though, the *services* that data centers enable, such as the “cloud,” AI, etc. BTW, note that “most of the capacity in data centers still supports run-of-the-mill cloud computing (cloud and traditional workloads currently make up about 85% of data center demand),” with AI making up much of the rest. Although for sure, AI is growing rapidly, but still…if you use the “cloud,” or if you’re in the “traditional workloads” category, you most definitely rely on the services that data centers provide, even if you hate them.
- Also note that data centers generate a LOT of revenues for localities – in Loudoun County, for instance, for FY2027, data centers are slated to provide about 45% (!) of the county’s total property tax revenue – and “the money they generate exceeds what Loudoun spends on every county function outside the school system. In effect, local police, courts, jails, fire and rescue, libraries, parks, animal control, and social services are funded without burdening residents.” I mean, do you think localities are going to want to give up that revenue? And if they do, is there any chance that residents of that locality are going to like seeing their services cut, their property taxes increase, or both? Nope! So how do we “square this circle?” Got me, but it’s going to have to be dealt with, for sure…
Anyway, those are few of my thoughts on all of this. What do you think?
