RICHMOND — Virginia lawmakers are scheduled to reconvene in Richmond in June 2026 to negotiate a state budget before the June 30 deadline. Failure to enact a budget by July 1, 2026, would result in a Virginia government shutdown.
The House of Delegates is scheduled to reconvene its special session on June 18, 2026, at 10 a.m., followed by the Senate on June 22, 2026, at noon. The 2026 regular session and an April special session both ended without a budget agreement, leaving the main point of disagreement unresolved: a Senate-backed proposal to phase out the sales and use tax exemption for data centers before its scheduled expiration in 2035.
The data center tax exemption, approved in 2008 and authorized through 2035, was originally projected to reduce state revenue by about $1.5 million annually. Its current value is now estimated at nearly $2 billion a year as Virginia has become the world’s largest data center market.
Senate Finance and Appropriations Committee Chair Louise Lucas argued that the data center industry places increasing demands on Virginia’s electrical grid and water resources while producing relatively few long-term jobs. “Virginia will have a budget by June 30. We will have to get this right for Virginians.” She stated that phasing out the exemption is necessary to protect the state’s electric grid, natural resources, and prevent higher utility costs for residents.
On June 5, 2026, Lucas posted on X that the governor and the House are gambling with Virginia’s future by allowing data centers to expand without concern for power, water, or tax contributions. She also wrote that Gov. Abigail Spanberger refuses to tax billion-dollar corporations to fund K-12 education, public safety, and offset federal funding cuts, adding that Virginians would hold her accountable if a government shutdown occurs.
Gov. Abigail Spanberger and House Democrats oppose ending the data center tax exemption before 2035. “As governor, I’m not going to break a contract that the state has signed — one, because who’s going to fund those lawsuits when we have to defend ourselves from broken contracts?” Spanberger said. She warned that ending the exemption early could invite legal challenges and send a negative signal to industry. “If Virginia were to take an adversarial stance towards any particular industry, it sends the wrong signal broadly,” she said in a Cardinal News interview.
In June 2026, Spanberger directed state finance officials to produce a revised revenue forecast through fiscal year 2031, saying accurate information is essential for long-term budget commitments. Despite economic concerns such as slower job growth and persistent inflation, Virginia state revenues continue to exceed expectations, providing additional flexibility for budget negotiators ahead of the July 1 deadline.