Column: Virginia shouldn’t scuttle its biggest economic advantage

Virginia's prominent status as the world's largest concentration of data centers, an industry that has injected over $80 billion into the commonwealth in the last two years and supports 112,000 jobs, is currently jeopardized by a legislative dispute. The General Assembly adjourned without passing a budget due to a disagreement between the Senate and House regarding the data center sales tax exemption. The Senate proposes to completely revoke the exemption, effective January 1, while the House advocates for its continuation with the addition of new environmental requirements. Governor Abigail Spanberger has convened a special session for Thursday to resolve this critical budget impasse, which sends a clear signal of uncertainty to the data center market, potentially leading companies to explore more favorable conditions in states like Kentucky and the Carolinas. Sarah Hunt, CEO and president of The Joseph Rainey Center for Public Policy, points out that public opposition to data centers, often rooted in concerns about water usage and electricity costs, significantly diminishes when voters are provided with factual information. Polling indicates increased support when voters learn about water recycling practices, job creation benefits, ratepayer protection pledges where companies generate their own electricity, and data centers funding local grid infrastructure upgrades. Hunt argues that a responsible path forward involves reforming the incentive by tying it to clean energy standards, mandating water efficiency, and including ratepayer protections, rather than an abrupt elimination.