CHESTERFIELD COUNTY, Va. — Dozens of Virginia families gathered at Manchester Middle School Tuesday night to debate the future of the state's data center industry, as state senators push to eliminate a tax exemption that critics say costs taxpayers roughly $2 billion annually.
State Sens. Louise Lucas and Mamie Locke are leading the effort to eliminate a sales and use tax exemption for data centers, arguing the cost to taxpayers has grown far beyond what lawmakers originally anticipated.
Lucas said the debate is about more than tax policy.
"We're here because this is about teachers, it's about firefighters, it's about safe roads and addressing traffic, it's our hospitals and our health insurance, it's about affordability and housing," Lucas said.
Virginia is home to an estimated 35 percent of the world's data centers which help manage and process data across the internet. Supporters say the industry generates billions in economic activity, but opponents say the tax break costs taxpayers roughly $2 billion annually and want that money invested elsewhere.
Delvin Walker, who represents a local labor union, said data centers create jobs but that companies must also be accountable to the communities where they operate.
"I think they should pay their fair share. I think they should be better neighbors for it," Walker said.
Workers who help build data centers expressed concern about what happens if companies decide to invest elsewhere.
"Every job we work is a temporary job, so we want to make sure we're continuing to have jobs," an industry worker said.
Business leaders warned that changing the tax exemption before it expires in 2035 could put future projects and construction jobs at risk.
"We've got to be pro-business and keeping jobs coming, so our economy can grow," said Brian Anderson, president and CEO of Chamber RVA.
Other business leaders also defended the industry and cautioned lawmakers against altering an incentive that companies relied on when investing in Virginia.
"Business relies on reliability and certainty, and so we can't change a deal in midstream and expect other industries and other companies that are thinking about us to say let's go there. We've got to stand up for our word," John Martin of RVA757Connects said.
State lawmakers have until June 30 to reach a final budget agreement that will determine Virginia's economy, workforce, and communities for years to come.
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