In the end, as the Virginia General Assembly returned Monday for a perfunctory vote on the one-sided $212 billion tax plan, it appears that the Senate president pro tempore was holding up the process not on the principle of clawing tax dollars from data center operators—they were the most eye-catching hostages to take—but for getting legalized marijuana put into the budget.
As soon as Gov. Abigail Spanberger announced that there was a Senate plan ready to go with a tax on excess electric usage, Sen. Louise Lucas’ lifting of opposition that she had only just picked up in the previous six months—given her long support of sales tax abatement for technology purchased by data center operators—one doesn’t have to wait for the FBI to finish its investigation of the senator’s business ventures to know why.
By the way, the Joint Legislative Audit Review Commission’s 2025 report says that each dollar of those tax breaks created $6.10 of labor income. Based on Virginia’s 5.75% tax rate, the commonwealth only “sacrificed” 65 cents, and once you start calculating the economic impact of people with more money to spend, the actual ‘cost’ continues to go down.
One red flag (the Left loves those) to watch for is a common Virginia General Assembly mistake: counting their chickens before they hatch.
The budget presumes that the “usage fee” that data centers will be asked to pay for excess electricity will generate $1.2 billion in tax collections, and they are gleefully already spending those dollars, despite an industry push to make these centers self-sustaining electrically. This has been a very popular campaign and is taking hold all over the country.
What happens when the Virginia spenders “only” collect three-quarters of a billion dollars?
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We learned about how this will play out when Virginians started buying up electric vehicles.
Albemarle County alone had the highest concentration of Teslas per capita in the United States before the Left decided it hated Elon Musk. The Virginia Department of Transportation was in crisis mode because it was tracking to receive far less gasoline tax money to fund its operations, so the General Assembly created a special “highway use fee” for electric and hybrid vehicles.
I hope you are not holding your breath that they don’t try to institute an “information superhighway” (an ancient name for the internet, kids) usage fee. Or maybe postage on emails? Don’t laugh. History may not repeat, but it rhymes.
Plus, the Virginia budget will allow your locality to impose a 1% sales tax to fund the singularly least transparent portion of government: the school division capital expenditure budget. Adding that to the 7% that your electric bills will be going up for a plan that even Pennsylvania’s Democrat governor, Josh Shapiro, won’t participate in—the Regional Greenhouse Gas Initiative—how’s that “Affordability Agenda” shaping up?
Question: If NOT charging a dollar of tax created $6 of income, what do you think charging MORE taxes will do?
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