Louise Lucas to the ‘Data Center Diva’: No more tax breaks for data centers

Gov. Abigail Spanberger and House of Delegates Speaker Don Scott want the state and localities to continue to be able to offer massive tax breaks to data center developers.

Louise Lucas, the chair of the Senate Appropriations Committee, let’s just say she’s not on the same page there.

“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,” Lucas posted on her socials on Friday.

Later, Lucas posted, in another message addressed to “Amazon Don and Data Center Diva,” that they’re making “a MONUMENTAL MISTAKE,” and that they should “ask Glenn Youngkin how that worked out for him.”

Narrator: f–king with Louise Lucas didn’t work out so well for Glenn Youngkin.

And in the case of data centers, Lucas has the bulk of Virginia on her side.

Two polls released in April have two-thirds of Virginians opposed to continued tax breaks to incentivize the construction of data centers, as a law dating to 2008 creating the exemptions now costs us $1.9 billion annually.

While you’ll hear from business types that Loudoun County gets nearly half its local tax revenue from data centers, a 2024 JLARC report details that “for the five localities with relatively mature data center markets, data center revenue ranged from less than 1 percent to 31 percent of total local revenue,” and that the pursuit of data center projects can be a fool’s errand.

From the report:

Localities in economically distressed areas of the state could benefit from data centers through increased local tax revenue, but these localities could have difficulty attracting the industry. Access to power and large, flat areas of land are key requirements for data centers, but are not available in some distressed areas, particularly in Southwest Virginia. Many distressed localities are also in rural areas that are away from data center customers and population centers, which makes it harder for them to attract the industry.

The data center industry is estimated to contribute 74,000 jobs, $5.5 billion in labor income, and $9.1 billion in GDP to the state economy annually, according to the JLARC report, but most of these economic benefits derive from the construction phase rather than data centers’ ongoing operations.

Once operational, “a typical 250,000-square-foot data center may have approximately 50 full-time workers, about half of which are contract workers,” the 2024 report tells us.

Continued protection for this industry is why, here on June 5, three months after the final gavel of the 2026 Virginia General Assembly session, three weeks and change from the start of the next fiscal year, we still don’t have a state budget.

“House conferees have gone home, but Senate conferees are still meeting,” Lucas said today, via her socials. “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 – a fair taxation and protecting our resources and citizens,” Lucas said.