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Senate agrees to budget conference report, adds data‑center electricity charge and boosts education and health funding
Summary
The Virginia Senate agreed to the House Bill 30 conference report June 22, approving a biennial budget that imposes an electricity consumption charge on large data centers (staff estimated it would produce up to $600 million a year and $1.2 billion over the biennium), raises K‑12 funding and teacher pay, expands Medicaid and marketplace subsidies, and sets DEQ timelines for water and noise rules for data centers.
The Senate met June 22 in Richmond and, after a presentation from Senate Finance and Appropriations staff and floor debate, agreed to the conference report on House Bill 30, the biennial budget package. The conference report includes a new electricity consumption charge on data centers designed to produce up to $600 million per year (staff explained the charge and a pro‑rata refund mechanism), targeted increases to K‑12 and higher education funding, teacher and state‑employee pay supplements, and several health and housing investments.
Staff to the Finance committee opened the briefing by laying out structural budget pressures and the conference report’s priorities. April (staff) said the package “prioritizes affordability and structural balance,” highlighting increases in standard deductions and $579 million over the biennium for K‑12 benchmarking and compensation supplements. Anya (staff) said the conference report provides a net $1.4 billion increase in direct K‑12 aid and funds a 4% compensation supplement for instructional and support positions.
On health care and social services, staff described additions to Medicaid funding, a $150 million appropriation for marketplace insurance subsidies targeted at households up to 250% of the federal poverty level, and a placeholder of $135 million tied to SNAP error‑rate risk from federal policy changes. Ren (staff) summarized nursing facility support, personal care rate increases, and epidemiology and public‑health investments.
The most contested policy in committee and on the floor was the treatment of data centers. Staff described an electricity consumption charge on data centers that they said was calculated using State Corporation Commission and other data and structured to deposit up to $600 million of revenue to the general fund with any excess returned pro‑rata to payers after the fiscal year. In floor remarks, the senator who moved adoption said the charge and accompanying environmental language were part of a negotiated compromise and that the package would raise roughly $1.2 billion over the biennium from data‑center charges.
Senators on both sides debated the measure’s balance. Supporters praised the budget’s investments in teachers, childcare, housing and health‑care subsidies and called the data‑center provisions an important first step toward accountability. Critics said the package left intact an earlier sales‑and‑use tax exemption and described the electricity charge as an inadequate substitute that did not require data centers to pay the full infrastructure or environmental costs of expansion; some speakers also objected to other policies included via conference‑report language, including the retail cannabis marketplace language and a legislator pay increase.
The clerk conducted a roll call on agreeing to the conference committee report. The transcript records an inconsistent set of roll‑call announcements (the clerk's spoken text in the record includes both “23 nos.” and “16 ayes, 23 no”), but the presiding officer announced that the conference report was agreed to. The transcript therefore records the report as agreed to on the Senate floor; the official Senate Journal should be consulted for the formal certified vote tally.
Key procedural and policy outcomes in the text and accompanying language include: - A consumption‑based electricity charge on data centers (staff described the rate and a $600 million annual cap, with excess revenue refunded pro‑rata). Staff told senators that the Joint Subcommittee on Tax Policy would review the sales‑and‑use tax exemption and other impacts of data centers later in the year. - DEQ direction and deadlines: staff said the conference report directs the Department of Environmental Quality to identify cooling‑water scarcity areas, require retrofits or higher‑efficiency cooling in existing centers in certain areas by mid‑2032, require certain new centers in the Eastern Virginia Groundwater Management Area to use air cooling or closed‑loop systems after Jan. 1, 2027, and adopt enforceable noise standards no later than Dec. 31, 2029, with civil penalties described in the presentation. - Education: the conference report funds a 4% compensation supplement for instructional and support positions in each year of the biennium, increases targeted add‑ons for at‑risk and special‑education students, increases school breakfast reimbursements, and provides one‑time and ongoing support in higher education and financial aid programs. - Health care and social services: increased Medicaid funding, $150 million for marketplace subsidies targeted to those at or below 250% FPL, and placeholder funding related to SNAP cost shifts tied to federal policy changes.
The Senate completed several block votes on memorial and commending resolutions before adjourning into recess. The budget measure will proceed through whatever gubernatorial actions follow (the presiding officer and multiple senators noted that the governor may sign the bill, issue amendments or line‑item vetoes, which the General Assembly would have to consider). The Senate record of June 22 contains the staff presentation, extended floor debate documenting both support and opposition, and the announced adoption of the conference report.
