General Assembly passes Spanberger’s budget amendments, biennial budget is finalized
The Virginia General Assembly finalized the biennial state budget, which includes a new statewide energy consumption tax on data centers. This budget measure aims to ensure the data center industry contributes its fair share for energy use. Additionally, the budget directs state agencies to review data center tax exemptions, explore water impact minimization, and establish noise standards.
The Virginia General Assembly adopted Governor Abigail Spanberger's amendments to the biennial budget, concluding months of uncertainty and negotiations and narrowly averting a state government shutdown. The finalized budget allocates $75 billion in general fund resources and a total of $207 billion in expenditures.
Key to the budget's passage was the inclusion of a "first-of-its-kind statewide energy consumption tax on data centers," a proposal championed by Governor Spanberger. She emphasized Virginia's responsibility to ensure the data center industry pays its fair share for energy usage. Senator Scott Surovell, D-Fairfax, noted that this consumption tax is projected to generate $1.2 billion over the biennium, contributing to teacher and state employee pay raises and building financial contingencies.
Beyond the tax, the budget directs several state agencies to review data center tax exemptions, investigate efforts to minimize water impacts, set noise standards, and collect comprehensive data on energy, water, and generation usage by these facilities. These reports will inform potential legislative actions during the 2027 session. House Speaker Don Scott, D-Portsmouth, praised the budget for protecting fiscal strength and investing in people, while House Minority Leader Terry Kilgore, R-Scott County, criticized the delayed passage and some provisions, including those related to the Regional Greenhouse Gase Initiative.