Virginia House, Senate to meet Monday as budget deadline inches closer

The House had been scheduled to meet Thursday but Speaker Don Scott, D-Portsmouth, canceled the session, citing budget negotiators’ failure to reach an agreement. By Thursday, leaders in both bodies had signaled negotiations were progressing and legislators were closing in on a deal, the Richmond Time-Dispatch reported.

The issue that has paralyzed the process for weeks is whether data centers should continue to be exempt from paying sales and use tax. Sen. Louise Lucas, D-Portsmouth, proposed eliminating the exemption and was the most fierce defender of that stance until this week.

On Tuesday, the Senate released an updated budget that removed the provision to revoke the exemption, replacing it with a tiered tax for data centers based on their generator use.

Lucas has traveled statewide in recent days, drumming up public support for her chamber’s plan to levy more costs onto data centers, which they said would net the state $1.8 billion.

“We know technology is not bad,” Lucas said Tuesday on a tour stop in Chesterfield. “You know, we all can benefit from technology, but we, as a government, have not done a good job in managing the regulations and the impact on our communities and that’s what we’ve got to rein in.”

The House released a reworked budget proposal last Friday that stripped environmental stipulations the body had previously recommended but preserved the tax exemption for the digital facilities that now number in the dozens statewide.

Gov. Abigail Spanberger supports the House bill and last week called the delay in finalizing the budget “outrageous.”

Both chambers’ spending plan proposals include tens of billions in state dollars for key priorities including Medicaid, Children’s Health Insurance Program and other healthcare funding, a retail cannabis marketplace that will launch next year, 3 to 4% pay raises for teachers and school construction funding, among others.

The Senate is set to gavel in at 10 a.m. Monday and the House will convene at 2 p.m.