(The Center Square) – Virginia lawmakers approved a two-year state budget Monday that includes a temporary tax on data centers, creates the framework for a regulated adult-use cannabis market and makes policy changes affecting energy, childcare and state government.
And gives themselves significant pay raises.
The House of Delegates voted 71-22 to approve the conference report for House Bill 30 after the Senate approved it 23-16 earlier in the day. The measure now heads to first-year Democratic Gov. Abigail Spanberger ahead of the July 1 start of the new fiscal year.
General Assembly salaries will rise starting Jan. 13. Senators and delegates will receive $50,000 annually – raises of 183.4% in the House and 177.8% in the Senate where sessions are scheduled for 60 days in even-numbered years and 30 days in odd-numbered years.
The speaker of the House of Delegates will receive $72,000. The budget includes about $2.1 million in fiscal year 2028 to fund the salary changes.
One of the budget’s biggest policy changes is a temporary electricity consumption tax on qualifying data centers. Operators will pay 1.1 cents for every kilowatt-hour of electricity consumed, with annual collections capped at $600 million. Lawmakers also directed the Joint Subcommittee on Tax Policy to study Virginia’s data center sales and use tax exemption and the industry’s economic and environmental impacts before making recommendations by Dec. 15.
The budget also changes how Virginia will use revenue generated through the Regional Greenhouse Gas Initiative, the multistate carbon-trading program the commonwealth rejoined this year after a three-year absence.
Under the agreement, 45% of revenue collected through the program will be used to provide electric bill credits for residential customers, small businesses and churches, while the remaining revenue will continue to be distributed under existing law.
Additional data center provisions direct the Department of Environmental Quality to establish cooling water requirements for certain new facilities and develop statewide noise regulations.
The agreement also creates the legal and regulatory framework for Virginia’s adult-use cannabis market. It provides about $18.3 million for the Virginia Cannabis Control Authority in fiscal year 2027 and nearly $20 million in fiscal year 2028, authorizes an interest-free treasury loan of up to $15 million and establishes licensing and regulatory deadlines for the new market.
The budget creates a $25 million Employee Child Care Assistance Pilot Program. Separately, it gives the superintendent of public instruction temporary authority through June 30, 2028, to adjust staff-to-child ratios and group sizes for certain licensed child care providers.
Other provisions authorize George Mason University to host the State Climate Office, provide $10 million over two years to capitalize the Virginia Clean Energy Bank, exempt the legislative branch from certain executive branch directives related to purchasing, finance and information technology, and provide $3 million over two years for the Virginia Tourism Authority to develop a marketing campaign aimed at attracting out-of-state Black, Indigenous and Hispanic visitors.
In a joint statement announcing the agreement Friday, Senate Finance and Appropriations Chairwoman Louise Lucas and House Appropriations Chairman Luke Torian said, “This budget agreement reflects our shared commitment to making Virginia more affordable for families. At a time when too many households are feeling squeezed by rising costs and economic uncertainty, this conference report makes historic investments to lower costs, strengthen our schools, protect access to healthcare, expand economic opportunity, and maintain the commonwealth’s strong fiscal foundation.”
They added, “We appreciate the hard work of the conferees, staff, and our colleagues in both chambers who helped make this agreement possible. We look forward to passing this conference report and sending it to Governor Spanberger’s desk.”
