RICHMOND, Va. — Virginia's top budget negotiators say talks are moving forward and "meaningful progress" is being made toward a final deal on the state's two-year budget — but lawmakers are set to wrap up the General Assembly's regular session Saturday without an agreement in place.
The central dispute is over a sales tax exemption for data centers. The Senate wants to eliminate the exemption entirely, while the House opposes ending it early. Lucas and Torian would not say whether a compromise has been reached on the exemption, but both said they are committed to making sure data centers pay their fair share.
Speaking to the media on Friday afternoon, Lucas said negotiations with data centers have been productive.
"I'm not sure what the mechanism is going to be, as long as we're able to get that money from the data centers. And I've had several conversations with them over the last few days and we've been making a lot of progress in terms of how we get there," Lucas said.
Torian echoed that sentiment, though stopped short of defining what a final number might look like.
"Fair share is going to be the number that they come back with to us that we feel comfortable agreeing with," Torian said.
Neither Lucas nor Torian said how long it would be until a final agreement is reached. If a deal cannot be reached in time, lawmakers would need to return to Richmond for a special session.
In a joint statement released Friday afternoon, the two negotiators outlined several priorities the final budget must address, including housing, healthcare, childcare, energy costs, and K-12 education funding.
"From the outset, our goal has been to craft an Affordable Virginia budget that lowers costs where families feel it most — housing, healthcare, childcare, and energy — while making the investments our communities depend on, beginning with a strong commitment to K–12 education," Lucas and Torian said.
"Virginia is home to one of the most important technology corridors in the world, supporting thousands of good-paying jobs and driving economic growth across the Commonwealth. We are committed to getting our approach to data center taxation right," Lucas and Torian said.
Lucas had pushed to eliminate the data center tax exemption entirely, arguing it cost Virginia nearly $2 billion in tax revenue last year — far more than anticipated when it was approved. The exemption is currently set to expire in 2035.
Torian and Gov. Abigail Spanberger had opposed ending the exemption early, saying the state made a commitment to its business partners.
"I think when you give your word, and you make a commitment, and you partner, you have a business partner, you honor your word. That's the integrity of the Commonwealth, and I think all of us can agree on that," Torian said.
Senate Minority Leader Ryan McDougle, a Republican, said his focus is on keeping costs down for residents, regardless of when a deal is reached.
"We're putting in policies that are going to cost Virginians more in the future. That's what we're focused on. Whether it's in 60 days or 70, I don't know that that makes a difference," McDougle said.
Under Virginia law, each chamber passes its own proposed budget before negotiators work to reconcile the two versions into a single bill to send to the governor. While missing the end of the regular session is not unprecedented, lawmakers must pass a budget before the new fiscal year begins on July 1.
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