VA House of Delegates Budget Conference Proposal Released; Calls for Commission to Examine Data Centers “Costs and Benefits” and Issue Report by 11/ 1

With an end-of-June deadline to reach a budget deal, and with the “sides” (in this case, apparently the State Senate vs. the House of Delegates and Gov. Abigail Spanberger) still not having agreed on how to handle the big issue of tax breaks for data centers, this morning the Virginia House Appropriations Committee announced its budget conference proposal. See below for screenshots of the first couple pages, including:

• “Proposed compromise package fully funds mandated activities and legislative priorities over the course of the biennium without relying on new tax revenue while maintaining a structurally balanced budget”
• “Spending initiatives focus on improving affordability for Virginians with resources dedicated to health insurance through ACA premium assistance and Medicaid, to childcare through the subsidy program and a new employer matching model, to food assistance through the SNAP program, and to increasing the minimum wage for Virginia workers”
• “House remains committed to addressing concerns related to data center impacts on Virginia’s energy use, environment, communities, and revenue streams”
• “The package includes explicit direction for the establishment of a Commission to thoroughly evaluate the direct and indirect costs and benefits of the data center industry, with a report and recommendations for legislative bill and budgetary changes to address financial, energy, and air/ water/noise impacts in time for consideration by the 2027 General Assembly”
• “Commission will ensure energy demands generated by data centers are not borne by residential rate payers;  Commission will investigate all elements of data center impacts, including community benefits agreements;  Need to consider the importance of the data center industry to revenue streams for local governments – including those with large industry presence, and those interested in attracting future development; Commission will understand the potential strategies for generating additional state revenue from the industry for future biennia; The final report would be due on November 1, 2026.”
• “In addition to the historic $2.6 billion increase in public education funding provided during 2024-2026 biennium, provides a total of $1.8 billion in additional state support over the upcoming 2026-2028 biennium”
• “Increases general fund support for the childcare subsidy program by $137.6 million, for a total of $577 million over the biennium. “
• “This compromise budget would provide $346.1 million in increased biennial funding for higher education over the 2026 base budget”
• “Our budget invests an additional $76.5 million over the biennium to help Virginians facing housing insecurity and increase the supply of affordable housing in the Commonwealth “
• “The budget includes multiple initiatives to improve the lives of working Virginians, including increasing the minimum wage, requiring
  employers to offer paid sick leave to employees, and supporting the development of a paid family and medical leave program “
• “Across the Secretarial area, this compromise proposal provides more funding than either the House or Senate budgets. In total, the package reflects increases of $3.1 billion in health and human services”
• “This amendment provides $865,000 each year from the general fund and four positions to support workload increases for the VDACS Office of Weights and Measures related to the establishment of an adult-use recreational cannabis market.” (Great work by State Senator Lashrecse Aird and Del. Paul Krizek on this issue, BTW!)

So, obviously, this proposal does not get rid of data center tax breaks, but instead proposes a commission to look at them. We’ll see what the State Senate, particularly Finance/Appropriations Chair Louise Lucas, thinks about this…

UPDATES 11:40 am from journalist Tyler Englander