Virginia Localities Weigh Data Center Taxes Against Growth Concerns

Local governments across Virginia are struggling to balance the massive tax windfalls from the data center industry with growing resident opposition to noise, pollution, and unchecked growth. In Loudoun County, approximately 250 facilities are projected to generate $1.3 billion in tax revenue next year, accounting for 40% of the county's total budget. This revenue has funded a $102 million recreation center, new schools, and a 30% reduction in residential property taxes over the last decade.

Despite these gains, the Loudoun County Board of Supervisors will vote on September 15 whether to implement a temporary pause on new data center applications. Supervisor Juli Briskman has pushed for a moratorium, arguing that corporations have run roughshod over the community. Conversely, economic development officials like Buddy Rizer maintain that the industry is the primary reason the county can keep taxes low and build infrastructure.

Statewide, Governor Abigail Spanberger has warned that data centers utilizing their own gas-powered generation may undermine the Virginia Clean Economy Act's 2045 carbon-emission goals. Other localities, including Henrico County, have used data center taxes to fund an Affordable Housing Trust Fund that has already approved 472 homes for first-time buyers. The Virginia General Assembly plans to revisit data center regulations and tax exemptions in January.

The debate extends beyond Virginia. In Alabama, U.S. Senator Tommy Tuberville is championing data center expansion as an essential revenue source, while other political figures, including U.S. Representative Terri Sewell, have called for a nationwide moratorium on construction.