Virginia Democrats may shut down their own government.
Virginia faces a government shutdown if the Democrat-controlled General Assembly fails to pass a budget by June 30, the Virginia Mercury reported. Data center policies may be the dividing line.
“I think there is a component of Democrats that see data centers as a lifeline to the energy industry and they hate that,” Power The Future Executive Director Daniel Turner told the Daily Caller News Foundation.
Virginia’s House of Delegates released a budget proposal that would study data centers’ long-term effects on the commonwealth while preserving their exemption from the 5.3% sales tax, the Mercury reported.
“[Friday’s] proposal creates a clear roadmap for evaluating the impact of the data center industry in Virginia and for reassessing the state’s incentives into the future, with a focus on fairness to ratepayers and the needs of local communities,” Democratic Virginia Governor Abigail Spanberger said.
Spanberger warned in a Thursday interview with the Mercury that abruptly axing the tax credits could harm Virginia’s pro-business reputation, communities dependent on data center revenue, and trigger lawsuits.
“Look at Mecklenburg, where they’ve built multiple public schools fully with data center funding,” she said. “When you have localities with nearly half their local revenues coming in from data centers, there’s some localities that are saying, wait, why are you going to pull up the ladder behind you?”
Democratic Virginia Senate Finance and Appropriations Chair Louise Lucas wants to eliminate the exemption before the budget passes amid concerns over rising utility costs and the environment, according to The Mercury. The embattled state senator also launched a listening tour to determine how data centers are affecting the commonwealth’s communities.
The offices of Spanberger and Lucas did not immediately respond to requests for comment.
“[Senate Majority Leader Luis Lucas] will tell you that data centers are taking the money and they’re taking it from her district, which is a predominantly black district in Virginia,” Turner said. “That’s why she hates data centers. If other people are profiting and we are not, it’s because they’re taking money from us. So, it’s that just zero-sum game of Marxist economics.”
Utility cost concerns contributed to bipartisan angst against data centers throughout the budget process, The Daily Signal reported Sunday.
“I am somebody who thinks we need to get rid of the data center tax break, because I don’t think we need to be giving $2 billion a year to huge AI big tech firms,” Republican State Sen. Glen Sturtevant told The Daily Signal. “It’s ultimately Virginians who pay for that in higher electric bills.”
Virginia hosts the most data centers in the world, accounting for over 100 “hyperscale” facilities, according to the Virginia Economic Development Partnership. These facilities total over 13.5 million square feet.
“The tech industry has recognized that data centers are not going to be powered by wind and solar. They’re not even trying to pretend they’re wind and solar,” Turner said. “These are the same companies who for years have told people that they are all in on the climate agenda, they’re all in on emission reduction.”
“We’ve been playing this game of anti-fossil fuels for decades, and now all of a sudden, there’s too much on the line in terms of their corporate interests. It’s not some fake ESG score to appease the United Nations. It’s not philanthropy. It’s corporate interests,” Turner said after pointing out that Google’s website states it’s been carbon neutral since 2007. “I think a lot of Democrats see this and they hate it. They’re all in on the green agenda and to see the resurrection or the dependency or the recognition that fossil fuels are the reliable, the cheap, the affordable, the abundant, the efficient form of energy production drives them up a wall.”
“I don’t think there is, quite frankly, enough evidence or any evidence that data centers are driving up utility prices,” Turner said when asked how data centers affect Virginians’ finances and local economies. “I think what’s driving up utility prices was the four years of the Biden EPA [Environmental Protection Agency] shutting fossil fuel plants and promising we will one day build these things. Well, none of those things were built. We just took offline reliable, affordable, fossil fuel production.”
“I think data centers are now the convenient scapegoat,” Turner said.
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