The Old Dominion's unresolved budget is taking a step forward thanks to a revised revenue forecast netting a $585.5 million improvement over what was expected.
Gov. Abigail Spanberger conveyed the news to the leaders of the Senate and House appropriations committees via a
"General Fund revenues have grown 7.3% percent and are ahead of our projections by 3.3%," said Spanberger.
"Specifically, the reforecast projects that Fiscal Year 2026 revenues will exceed the official forecast by $585.5 million. For fiscal years 2027 and 2028, the revised outlook projects an additional $922.6 million in General Fund revenues, of which $582.4 million is identified for fiscal year 2027 and $340.2 million for fiscal year 2028."
The letter is accompanied by a 20-page report.
The expected $1.5 billion 3-year uptick is being ascribed to a rise in non-withholding collections of individual income taxes and lower than anticipated refunds.
The General Assembly will reconvene in a special session in another attempt to resolve the budget with the House of Delegates meeting on June 18, followed by the Senate on June 22. The new fiscal year begins July 1.
Virginia has suffered from job loss, just like its neighbors in suburban Maryland and Washington D.C. Cuts to the federal workforce enacted by the Trump administration attract most of the blame.
Last month, Virginia Secretary of Finance Mark Sickles placed the number of lost jobs at 41,900 since the start of the fiscal year 2026.
The state maintains triple-A bond ratings and a stable outlook.
Virginia works on two-year budget cycles with Democrat Gov. Spanberger inheriting the budget passed by her predecessor Republican Glenn Youngkin.
Efforts to pass the new proposed $212 billion budget hit a brick wall in April as a Senate bill that would end a data center sales tax exemption sparked controversy.
The House version of the bill keeps the exemption in place, putting Spanberger in a position to referee the fight.
The exemption was legislated into existence in 2008 and went into effect in 2010 when data centers were in their infancy. At the time, the loss in sales tax was estimated to be $1.54 million.
Opponents say the policy now results in roughly $1.6 to 2 billion in foregone tax revenue each year.
The exemption is scheduled to sunset in 2035 but could be extended to 2050.
Loudon County Virginia is acknowledged as a data center power center that collects enough local taxes to fund the bulk of its school budget while the state collects no sales tax on any new equipment purchased, including computer chips.
In April, a backlash in Prince William County squelched plans to add as many as 37 data centers to the area.
The plan to build more data centers to accommodate Artificial intelligence is under
