The Senate seems to be at odds with the House of Delegates and the Executive Mansion over taxing data centers. Sen. Louise Lucas, D-Portsmouth, wants to eliminate a tax break for data centers, estimated at $1.6 billion a year. Speaker of the House Don Scott, D-Portsmouth, who has said he loves data centers, wants to keep the tax break. Gov. Abigail Spanberger has also indicated that she does not want to repeal the tax break — setting up a showdown between Lucas, who is the chair of the Senate Appropriations Committee, and her Democratic colleagues down the hall.
This disagreement was made public Monday night, when Lucas posted a message on social media indicating she would not back down.
“Gov. Spanberger thinks our chicken isn’t cooked- then what is the Senate supposed to pluck out of our budget?” Lucas wrote. “Raises for teachers, health insurance assistance, transit support, a tax rebate, or childcare slots? The Governor + House are worried about tax breaks to big corporations.”
Earlier on Monday, Lucas spoke on the Spanberger administration’s efforts to work with the Senate, giving the governor a B- grade.
“I think they got the message and we’ll see something different next session,” Lucas told Radio IQ.
Scott, during a press conference Tuesday morning, spoke optimistically about the differences between the House and Senate on data center tax breaks.
“I got so much love and respect for Senator Lucas. She’s been a long-time mentor, and so if she says whatever she says, while we’re in this budget negotiation, it’s politics … I think we will end up working it out,” Scott said.
“I think we are aligned on [more than] 99 percent of issues. So I think we’ll be fine,” Scott continued. “This is just one of those things that we’re going to work through. It always gets worked out. I would not get so emotionally attached to any one of these issues.”
Spanberger has not specifically said which side of this debate she lands on, but all signs and statements point to her supporting the tax break.
Her office referred to Virginia Scope to the comment it gave the Richmond Times-Dispatch on Monday.
“As budget negotiations advance, the Governor has expressed to House and Senate leaders her serious concerns about going back on commitments Virginia has made to businesses that it recruited to invest in the Commonwealth,” spokesperson Libby Wiet said. “The Governor is committed to being a partner to facilitate conversations between House and Senate budget negotiators.
The Richmond Times-Dispatch also reported that Spanberger provided budget conferees with a letter expressing concern about the economic impact of removing the data center tax break.
“I know we share a commitment to protecting Virginia’s fiscal integrity, upholding our commitments to businesses that we have invited to invest in the Commonwealth, and maintaining the AAA bond rating we have held since 1938,” Spanberger wrote. “We need clear expectations for the Commonwealth’s future revenue to ensure we have structural balance.”
The legislative session is scheduled to conclude on Saturday.