Welcome to Notes from the Square, a weekly roundup of state politics and policy news. Each Friday, we bring you updates on the movers and shakers in Virginia politics as well as the legislation they’re supporting or opposing — with a Southwest and Southside Virginia focus.
Got a tip or story idea? Email me at elizabeth@cardinalnews.org.
A plume of white smoke above the Capitol?
State Senate President Pro Tempore Louise Lucas posted on X on Tuesday that “there is a plume of white smoke!” regarding biennial budget negotiations. Lucas, chair of the Senate Finance Committee, borrowed the papal conclave imagery to announce that she and House of Delegates Finance Committee Chair Luke Torian have met, along with their respective committees and staffs, for a “very spirited discussion about the budget.”
The main sticking point in the budget negotiations has been data center tax subsidies, but, per the Portsmouth Democratic senator’s tweet, there may be a light at the end of this long, dark and seemingly endless tunnel.
“The good news is that we’re getting close to an agreement on how to pay for core services. We will have a budget before June 30th and you can take that to the bank!” Lucas said in her post.
In Virginia, data centers that meet certain requirements, including investing at least $150 million and creating at least 50 jobs — or, in economically distressed localities, $70 million and 10 jobs — are exempt from paying state retail sales and use tax on computers and other equipment.
The state Senate budget proposal includes a clause to end those exemptions in 2027, eight years earlier than their current expiration. The House budget proposal includes no such clause, creating a difference of more than $1 billion between the two proposals.
Lucas has been a strong proponent of ending the exemptions early. Torian, a Democrat from Prince William County, has said that he believes Virginia must honor memorandums of understanding that it signed with the tech companies — a position shared by the governor.
The state Senate will return to Richmond on June 22 to convene the 2026 special session, likely to tackle the biennial budget. The House of Delegates will return on June 18.
The General Assembly is just under one month out from the deadline to come to an agreement over its spending priorities. That deadline is 11:59 p.m. June 30, when spending for the current biennium is set to expire.
Gov. Abigail Spanberger had requested a full reforecasting of the state’s financial status in May in an effort to aid budget negotiations.
Speaking of that reforecasting …
Spanberger sent the updated state revenue forecast to the General Assembly in a letter on Monday.
The updated revenue forecast projects a $1.5 billion increase in general fund revenues for fiscal years 2026-2028 — strangely (or not) close to the amount of revenue that ending the data centers’ tax exemptions early is expected to generate.
But Spanberger warned the General Assembly against spending that $1.5 billion they found in the couch cushions too fast: Virginia is still a front-line state in federal funding and workforce cuts, and federal foreign policy initiatives have led to an increase in day-to-day costs.
“While forecasted General Fund revenues have increased, I remain concerned by rising national economic instability, the ongoing conflict in Iran, and the continued impacts of federal workforce cuts. We must account for these evolving economic conditions as we plan for the long-term strength of our Commonwealth,” she said in a statement on Monday.
Secretary of Finance Mark Sickles added that the updated forecast “confirms that the Commonwealth’s revenue performance remains solid but also factors in the deteriorating economic conditions and increased uncertainty in the national outlook.
“The additional $1.5 billion in updated projected revenues should provide the General Assembly with enough resources to craft a structurally balanced budget that mitigates any potential risks related to national market volatility,” he said.
In another type of forecasting, Spanberger marks the beginning of the 2026 hurricane season
The governor spent Wednesday morning at the Virginia Emergency Operations Center in Chesterfield County going through planning exercises and scenarios to mark the start of the 2026 hurricane season, which began June 1.
Flanked by emergency operations personnel during a press conference, she urged Virginians across the commonwealth to begin preparations for bad weather now.
“Whether you live in Hampton Roads, Southwest Virginia, or anywhere in between, severe weather can impact every community across our Commonwealth. By taking steps to prepare now, we can save lives, protect property, and lessen the damage to local communities when storms threaten Virginia,” Spanberger said in a statement.
The governor convened Virginia Department of Emergency Management personnel, public safety leaders and senior administration officials on Wednesday to take part in exercises to strengthen coordination and hurricane preparedness.
Hurricane season runs from June 1 through Nov. 30. The greatest risk for Virginia usually occurs from late summer into early fall.
“We know storms that start in the Atlantic or Gulf can come north and cause severe damage to Virginia, and we saw this with the devastation caused by Hurricane Helene. We are working together to strengthen collaboration across state agencies, but our first responders, community organizations, and individual Virginians are equally as important to an effective disaster response,” Spanberger said.
Boarded-up businesses and empty flood-damaged homes remain in Southwest Virginia as stark reminders of the devastation brought by Hurricane Helene in 2024 and the February flooding in 2025. More on that to come later.
In the meantime, Spanberger outlined the following steps to prepare for hurricane season and to keep families safe:
- Build or refresh an emergency kit with enough food, water, medications, batteries, flashlights and essential supplies to last at least three days. Learn more about building an emergency supply kit.
- Know your evacuation zone and evacuation routes, especially for residents in coastal and low-lying flood-prone areas. Review Virginia’s evacuation zones at KnowYourZoneVA.org.
- Review your family emergency plan, including how family members will communicate if separated. Learn more about the Federal Emergency Management Agency guidance on family communications plans.
- Sign up for local emergency alerts and monitor trusted weather information throughout the season.
- Prepare important documents by storing insurance records, identification and medical information in a waterproof container or secure digital location.
- Check generators and backup power sources safely before they are needed.
- Make a plan for pets, including food, medications and transportation.
