ROUNDUP: Budget Proposals Lack Environmental Protections for Data Center Growth
Picture of a data center in Loudon County, Virginia. Photo by Hugh Kenny.
In a move that delays action on environmental protections, the Virginia House of Delegates released an updated budget proposal on Friday that does not include environmental standards for the explosive data center industry in Virginia. In the House’s original proposed budget, data centers would have been required to meet strict environmental and sustainability standards in order to receive the tax break that the industry already receives in the Commonwealth. The House budget instead replaces protections with a Commission to look at accountability and provide recommendations at a future date.
The Senate released its proposed budget overview yesterday and has removed its previous push to eliminate the tax break entirely for the industry, the main factor that led to a delay in approving a budget. They now propose a fee on data centers that would put money in the state’s general fund. Senator Lucas has also said the full budget will include a workgroup to study the tax exemption.
Virginians are demanding action now on greater accountability for the rapid expansion of data centers and the environmental impacts associated with them. At a time when costs and inflation have reached a three-year high, households cannot afford to continue subsidizing the data center industry’s energy needs.
The Impacts of Data Centers
The impacts of data center growth on Virginia’s environment, nearby communities’ health, and ratepayers’ bills are known and startling. Right now, Virginians face financial, environmental, and health risks from unsustainable data center growth; utility plans powered by expensive gas plants rather than affordable clean energy; and a potentially overbuilt system in the event that data center demands fail to materialize.
Decision-makers have tools available to safeguard Virginians and have already required an intensive study of this issue through the Joint Legislative Audit and Review Commission (JLARC). The harms of the industry in terms of pollution, water usage, higher energy bills, and negative impacts on local communities are well-documented.
Public Opinion
Poll after poll shows a rapidly growing opposition to data center development here in Virginia and across the country.
Seven in 10 Virginians now oppose having a data center built near them.
Another recent poll shows that Virginians are also overwhelmingly concerned about data centers’ environmental impact: 83% of Virginians are concerned about rising electricity prices, 76% are concerned about water contamination, and 70% are concerned about water scarcity, 78% are concerned by data center air pollution, and 80% oppose the current tax exemption.
Strong environmental and ratepayer protection reforms are needed to hold the data center industry accountable. We need a clean energy system where data centers pay their fair share, rather than forcing local households to underwrite skyrocketing electricity demand and nearby communities to bear the brunt of their pollution.
Statements from the Community
Virginia Conservation Network Partners and other stakeholders released the following statements regarding the budget. Check back for more statements.
Last updated on June 17th, 2026 at 10 AM.
“Voters in Virginia are absolutely tired of leaders failing to bring meaningful environmental reforms to data centers in the Commonwealth. With this latest state budget failure, the only reasonable path now is to call for a full-on moratorium on new data centers until our leaders can finally act to protect our water, farmland, communities and climate.”
– Mike Tidwell, Executive Director
Chesapeake Bay Foundation
“Virginia’s data center boom is moving faster than the law. This year, lawmakers must enact strong regulations for data centers that protect our air and water. Unless Virginia acts now, we’ll pay for the rapid expansion of data centers in the Commonwealth with our drinking water, clean air, and thriving waterways.”
– Jay Ford, Virginia Policy Manager
Southern Environmental Law Center
“Data centers continue to flock to our state, and it is hurting everyday Virginians. But this unfortunate dynamic is also an opportunity. Virginia can stand up and demand this industry be better neighbors and citizens.”
– Nate Benforado, Senior Attorney
Appalachian Voices
“So far, the General Assembly has allowed the unconstrained development of polluting data centers in the Commonwealth, and this simply cannot continue. If our decisionmakers demand that the wealthiest industry in the world achieve sensible public health and environmental standards, the industry will do it.”
– Peter Anderson, Director of State Energy Policy
National Parks Conservation Association
“Data centers remain the biggest threat to national parks in Virginia. From massive facilities planned directly adjacent to parks to massive transmission lines planned to feed the energy-hungry facilities, the impacts of this industry will soon be seen at dozens of national parks around Virginia if nothing changes. Despite these impacts, Virginia’s House of Delegates and Governor Spanberger seem content to yet again kick the can on this important issue. The National Parks Conservation Association is proud to join numerous other conservation non-profits in calling for a temporary pause on new data centers until Virginia enacts meaningful reforms on this industry.”
– Kyle Hart, Mid-Atlantic Senior Program Manager
Sierra Club Virginia Chapter
“Until the legislature takes its role seriously and implements standards that, at a minimum, place clean energy requirements on Big Tech companies, eliminate the use of on-site diesel backup power, ban the use of on-site fossil fuel generation, and configure a cost and tax structure that doesn’t hurt Virginians wallets to the tune of billions of dollars, there is no reason for the continued approval of any additional projects. If the legislature’s true solution at this moment is to study the issue with no immediate change to the industry’s environmental operations or its far-too-generous tax structures, then there is no credible argument against the temporary pause while that study is underway.”
– Connor Kish, Director
Virginia League of Conservation Voters
“Virginians are rightfully angry. The data center industry is polluting our air, driving up our electric bills and being a bad neighbor, and yet we are no closer today to solutions than we were in January. Virginia politicians are failing their voters. People are sick and tired of watching big corporations and the billionaires and trillionaires who run them get ahead at their expense. Without standards in place, the data center industry will continue to harm communities, pollute our air and water, and make it harder to secure our clean energy future. No more data center projects should be allowed to move forward until lawmakers pass the comprehensive solutions that Virginians deserve and demand.”
– Michael Town, Executive Director