Overview
- The budget impasse centers on data center tax policy and has left negotiators without an agreement as the state races to meet the June 30 fiscal deadline.
- House leaders published a conference report that preserves the current sales-and-use tax exemption and creates a 13-member Virginia Commission on Data Center Accountability backed by Gov. Abigail Spanberger to study impacts and recommend changes.
- Senate negotiators countered with a proposal for a tiered impact fee on data center backup generators projected to raise about $1.7 billion over two years as an alternative revenue source.
- Tensions have sharpened inside the Democratic majority, with Senate President Pro Tempore L. Louise Lucas running a statewide listening tour to press for faster action and House leaders canceling a planned June 18 session after talks stalled on June 16.
- The dispute hangs on a broader trade-off: supporters warn that reversing or altering long-standing incentives could trigger lawsuits and scare off jobs and investment, while critics point to roughly $2 billion in annual lost revenue and local harms from grid strain, water use, noise, and rising costs.