The billions in data center tax breaks that most of us detest will survive the 2026 budget fight, with word from Senate Finance & Appropriations Chair Louise Lucas and House Appropriations Chair Luke Torian that legislators have reached a compromise on the biennial budget.
Lucas and Torian released a joint statement late Friday night announcing the agreement that had been reached by budget conferees from the House of Delegates and State Senate.
“This budget agreement reflects our shared commitment to making Virginia more affordable for families,” the legislators said in the statement. “At a time when too many households are feeling squeezed by rising costs and economic uncertainty, this conference report makes historic investments to lower costs, strengthen our schools, protect access to healthcare, expand economic opportunity, and maintain the Commonwealth’s strong fiscal foundation.
“We appreciate the hard work of the conferees, staff, and our colleagues in both chambers who helped make this agreement possible. We look forward to passing this conference report and sending it to Gov. Spanberger’s desk.”
Of note: this statement went out by email at 8:47 p.m. last night. At this writing, around 11 a.m. Saturday morning, so, 14+ hours later, Spanberger hasn’t weighed in with her thoughts on the agreement, which preserves the $1.9 billion in annual tax exemptions for data center owners, but does place an electricity consumption tax on data centers that is projected to generate $600 million a year.
The consumption tax is set at a rate of $0.011 per kilowatt hour.
You know, we could just triple that, and that would just about make up the difference with the tax exemptions that we’ve agreed to – and that Spanberger has said repeatedly she doesn’t just want to outright repeal, fearful of going back on what she’s treating as contractual agreements.
Hmmm.
Idea time there, maybe for next year?
Let Republicans then take the lead in crying and moaning over a tax increase, and have to defend that going into the 2027 Virginia midterms.
In the here and now: Spanberger is, at the moment, silent on this deal, but her back’s against the wall, so, when we do hear from her, almost certainly soon, it’s going to be to say, Great, thanks for getting this done.
Anything short of that could lead to impeachment proceedings.
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Chris Graham
