The state budget, and thus every one of our 323 local city, town and county budgets, is still being held up, almost entirely because Gov. Abigail Spanberger and House of Delegates Speaker Don Scott want to preserve tax breaks for developers of hyperscale data centers that cost Virginia taxpayers in the area of $1.9 billion a year.
To be fair, it’s not all the governor’s and House speaker’s fault here – if State Sen. Louise Lucas, the chair of the Senate Appropriations Committee, would just wave the white flag on her push to eliminate the tax breaks, we’d have us a state budget, and the locals could do their thing.
I’m on #TeamLucas on this, and from what I’m seeing in the poll numbers, it looks like most of you reading this are, too.
Hyperscale?
Hyperscale data centers are loosely defined as being at least 10,000 square feet, using at least 5,000 servers, and consuming more than 50 MW of power annually – for a sense of scale, a 50 MW supply is enough to average out the daily needs of 30,000 to 50,000 homes.
We’ve got more than 150 of these yu-u-u-ge data centers in Virginia – more than 35 percent of all of the hyperscale data centers worldwide – and really, it seems like we’re just getting started, even as the reality is, outside the developers and suits in local and state government, nobody seems to want to have anything to do with the things.
Appalachian Voices, a nonprofit founded in 1997 with the mission to “protect the land, air and water of Central and Southern Appalachia and advance a just transition to a generative and equitable clean energy economy,” sent us a memo that highlighted recent polling confirming just how (un)popular data centers are with Virginians.
From the memo
- A recent Washington Post-Schar School poll found support for construction of data centers among Virginians dropped from 69 percent in 2023 to 35 percent in 2026. The poll also found weakening support for continuing the tax breaks for data centers – from 61 percent in 2023 to 26 percent in the latest poll.
- A Morning Consult poll conducted on behalf of Stand.earth in April found that 83 percent of Virginians are concerned about rising electricity prices, 76 percent are concerned about water contamination, and 70 percent are concerned about water scarcity. Notable: 52 percent said they would be more likely to support a data center in their community if it were powered entirely by renewable energy with no diesel generators or on-site fossil fuel power.
- A Global Strategy Group poll conducted with Potential Energy found that voters attribute rising energy costs to demand from data centers and utilities trying to maximize their profits. The poll found strong support for using clean energy to meet growing demand — with 70 percent supporting more clean energy in Virginia and 62 percent agreeing that, due to rising demand from data centers, we need to build more clean energy sources to keep electricity costs from skyrocketing.
You see what’s going on here?
We don’t like the tax breaks – we think data center developers need to pay their fair share – but there’s a bigger issue at hand.
“No matter where you look or who you talk to, it’s clear that the way Big Tech operates its AI data centers is extremely unpopular,” said Nathan Taft, the Senior Campaigner on Stand.earth’s Fossil-Free Computing Campaign.
“If companies like Microsoft and Amazon want the social license to keep building these projects that overhaul entire landscapes, they need to significantly ramp up investment in renewable energy and do right by local communities,” Taft said.
Data center developers not paying their fair share in terms of taxes is just part of how they’re not being made to play fair.
They’re also driving up the cost of what the rest of us have to pay for electricity and water, and they’re polluting our air.
Not only should they not be getting tax breaks, but they should be required to build environmental offsets into their costs for doing business.
This can actually be a good thing, if we can get our electeds to understand the opportunity that we have.
Because of course, the reason these data centers are being built is that we all use massive amounts of data.
We should have been requiring that data center developers include environmental offsets in their projects from the get-go, but, can’t make up for our lack of foresight from 20 years ago now.
We can, though, fix the problem now and going forward.
Or we can keep doing what we’ve been doing, which represents a transfer of wealth from the middle class to the 1 percent, and also adds to our climate issues.
I have a feeling that our leaders will end up just kicking the can down the road, but they can prove me wrong.
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Chris Graham
