LISTEN: Governor Spanberger defends existing data center deals as Botetourt critics press for changes
Governor Abigail Spanberger used a bill signing in Roanoke this week to restate her concern about walking back signed data center agreements, even as the General Assembly fights over future tax breaks that have stalled Virginia’s budget.
Speaking to reporters at the Higher Education Center on Monday — where she signed a package of workforce development bills into law — Spanberger was asked about protests over Google’s planned three-data-center campus at Botetourt County’s Greenfield Industrial Park and the broader sales and use tax exemption for data centers.
She said she supports requiring data centers to “pay their fair share,” especially on energy, but drew a firm line on existing contracts and memorandums of understanding.
Spanberger told reporters she is open to lawmakers reconsidering the tax exemption going forward, but said she has “significant concerns” about retroactively changing the terms of deals already signed with companies like Google. She argued that Virginia’s reputation depends on honoring those commitments once they are in place.
Opponents who had been demonstrating just outside the bill signing said the state should be just as concerned about promises made to residents.
Protesters: Honor the ‘social contract’ with residents first
Scott Yates, a Roanoke resident, Botetourt County property owner and organizer with the Southwest Virginia Data Center Transparency Alliance, said the scale and pace of data center growth in Virginia justify changing the law even if it means revisiting past decisions.
“I get it,” Yates said of the governor’s reluctance to touch existing agreements. “But data centers and the proliferation of data centers specifically in Virginia is just so far out of the norm of any kind of business or sense of normalcy that we’ve seen. In business, in regards to the ecology, that to save our resources, to save our pocketbooks, I think this would be a very fine scenario where we should change some laws to protect citizens and residents.”
Yates argued that waiting to adjust policy until after large campuses are built would leave local communities with most of the environmental and infrastructure impacts already locked in.
“That’s a genie that’s gonna be let out of the bottle and there’s nothing we can do about it after that,” he said.
Another organizer, Roanoke City resident Ben Verschoor, said the state’s obligation to voters should weigh more heavily than its promises to technology companies.
He pointed to what he called “behind closed doors” negotiations over the Botetourt project.
“Given how many of these deals have been made behind closed doors without people’s knowledge and, as in our case with Botetourt County, we’re only finding out after the agreement has already been made,” Verschoor said, “which agreements are we more interested in honoring here, the constituents or the big tech companies?”
Water use and infrastructure concerns
Google plans three data centers at Greenfield Industrial Park under agreements with Botetourt County officials. Those officials have said each facility could use up to 2 million gallons of water per day in peak conditions, stressing that the maximum number would be reached only during periods of extreme heat.
The Western Virginia Water Authority has said the region was already expected to need an additional water source in the long term and that Google’s presence could help accelerate that investment.
County leaders have also said the project will follow all state and local regulations and safety guidelines.
Data center tax fight stalls state budget in Richmond
The debate over Google’s Botetourt campus is unfolding as a larger fight over data center tax breaks has helped stall Virginia’s $212 billion budget in Richmond.
The General Assembly convened for a special session last week but recessed after just a few hours without a deal. At the center of the impasse is a dispute within the Democratic majority over whether to phase out the retail sales and use tax exemption on data center equipment.
The Senate has proposed ending the exemption beginning Jan. 1, 2027 — a move supporters say could reclaim roughly $1.6 billion in annual foregone revenue and redirect it toward schools, transportation and infrastructure. The House budget omits the change.
Senate Finance and Appropriations Chair Louise Lucas, D-Portsmouth, has argued that data centers should “pay their fair share” to help fund education, transportation and social services. Under the Senate proposal, nearly $300 million in revenue alone would be directed to transportation projects.
House Appropriations Chair Luke Torian, D-Prince William, said talks have yet to meaningfully advance and that the data center dispute is compounded by an unexpected shortfall of about $250 million following Spanberger’s veto of legislation that would have legalized and taxed skill games.
In recent weeks, lawmakers have discussed potential compromises with industry representatives, including an energy consumption tax for high-demand users or narrowing what equipment qualifies for the exemption, but no agreement has been reached.
The Data Center Coalition said the industry has offered proposals that would provide $1.1 billion in new state revenue over the biennium and hundreds of millions in recurring revenue, but those proposals were rejected.
Republicans have largely aligned with the governor’s position. House Minority Leader Terry Kilgore, R-Scott, said the state should honor its commitments.
“We made promises to these data centers when they came here that ‘you’d have this tax credit,’ and we as Virginians need to fulfill our promises,” Kilgore said.
With the fiscal year set to begin July 1, lawmakers face a narrowing window to strike a budget deal. For now, Google’s Botetourt campus remains on track under existing agreements while organizers continue pressing local governments, the General Assembly and the governor’s office to put residents’ concerns ahead of previously negotiated incentives, especially around water supplies and energy infrastructure.
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