Virginia Finalizes $207 Billion Budget, Averting First-Ever Shutdown

Overview

• Lawmakers in the House and Senate approved Gov. Abigail Spanberger’s 14 amendments on Monday, June 29, finalizing the two-year, $207 billion budget that takes effect July 1 without the governor’s signature.
• The budget creates a new Data Center Electricity Consumption Tax of $0.011 per kilowatt-hour, capped at $600 million per year with refunds if the cap is reached, a compromise meant to raise roughly $600 million annually.
• The plan locks in pay increases and tax changes, including 4% raises for teachers and 3.5% raises for state employees, higher standard deductions for taxpayers, and expanded funding for child care and home-care reimbursements.
• The amendment package bundles many policy changes, including a delay to a firearms-code change until July 1, 2027, firefighter cancer-screening grants, election referendum funding, a $5 million state digital services team, and water-conservation and billing-transparency rules for data centers.
• The deal reduces the budget’s unappropriated balance from $179 million to $117 million and signals continued tension between lawmakers and the data-center industry over incentives, local water and grid impacts, and future regulation that could affect investment and local planning.