FOR IMMEDIATE RELEASE from VMA's consultant, Kemper Consulting
March 16, 2026
Virginia General Assembly Adjourns
The General Assembly Session adjourned Saturday evening without adopting the 2026-2028 biennial budget. Prior to adjourning, the General Assembly adopted a resolution petitioning the Governor for a Special Session on the Budget Bill for Thursday, April 23, 2026, the day after the reconvened session.
Budget Impasse
The budget conferees of the House of Delegates and the Senate of Virginia will continue to negotiate a new two-year budget ahead of the Special Session in April. As a reminder, budget bills must be approved with a simple majority vote of each chamber as well as the governor’s signature. The new budget takes effect on July 1, the first day of Virginia’s fiscal year.
The impasse between the House and Senate stems from a Senate budget proposal repealing the sales and use tax exemption for data centers as of January 1, 2027. The Senate repeals the exemption that dates to 2010 for current and prospective facilities. The House leadership opposes the Senate’s recommendation.
In 2025, the exemption totaled almost $2.0 billion. The statutory exemption is set to expire in 2035, and estimates suggest Virginia is home to more than 600 data centers with several hundred more planned. The Senate budget embeds and appropriates the new revenue in its budget, while the House does not. To that end, the Richmond Times Dispatch reports that the chambers have a $1.0 billion gap in revenues.
A significant number of funding and policy issues must be resolved by the budget conferees, including, but not limited to:
- Tax conformity policy resulting from the changes in House Resolution 1, the federal reconciliation bill;
- Supplemental Nutrition Assistance Program funding levels also resulting from HR 1;
- K-12 and Higher Education operating and capital funding including K-12 teacher raises;
- Fiscal Year 2027 required support for the Washington Metropolitan Area Transit Authority;
- Wastewater treatment funding levels for localities; and
- Workforce Development funding levels.
Constitutional Amendments
The House and Senate passed the required second reference of four constitutional amendments. Virginians will consider three referenda in November:
- Fundamental Right to Reproductive Freedom: HJ 1 and SJ 1:
- Automatic Restoration of Voting Rights: HJ 2 and SJ 2:
- Repeal of the same-sex marriage prohibition & protecting marriage equality: HJ 3 and SJ 3:
As Kemper Consulting reported in its “Crossover” client release of February 17, the General Assembly also passed a proposed constitutional amendment and a new Congressional map on party-line votes.
If approved by the voters, the amendment provides a temporary, mid-decade redistricting that may shift Virginia’s U.S. House delegation from six Democrats and five Republicans to a projected ten Democrats and one Republican during November’s 2026 midterm elections. Republican leadership filed suit to block the amendment. The constitutional amendment and new maps would expire prior to the next decennial redistricting process in conjunction with the 2030 census, thereby complying with or defaulting to Virginia’s bipartisan redistricting constitutional amendment and act.
The Virginia Supreme Court has allowed the referenda to proceed while the legal challenges continue. Early voting began this past week, and Election Day is April 21. The election results would be null and void should the Republican court challenges prevail.
Legislation
The General Assembly adopted several high-profile bills during the 60-day legislative session. Several are noted below. Governors have 30 days upon adjournment of the General Assembly to act on bills and retain the constitutional authority to approve (i.e. sign bills into law), veto, and propose amendments to measures. As noted, the General Assembly will reconvene on April 22 to consider Governor Spanberger’s recommendations. Her actions are due back to the General Assembly on April 13th.
Minimum Wage: Increasing it to $15.00 an hour by January 1, 2028. HB 1 and SB 1
Cannabis: Establishing a retail marketplace on January 1, 2027. HB 642 and SB 542
Collective Bargaining: Providing employees of state and local government bodies the ability to negotiate wage, hours and other terms of employment. The development of the state oversight structure will begin upon enactment of the legislation, while implementation begins in 2028. HB 1263 and SB 37
Paid Family and Medical Leave: Establishing an insurance plan overseen by the state applicable to the private sector and local government entities. Implementation begins in 2028. HB 1207 and SB 2
Paid Sick Leave: Requiring one hour of paid sick leave for every 30 hours worked for employees of private employers and state and local governments. The bill is effective on July 1, 2027. HB 5 and SB 199
Child Care Access Calculation: Establish a child care access calculation to provide Virginia’s policymakers with clear and consistent information on funding early childcare programs. HB 1208 and SB 134
Skill Games: Establishes a regulatory framework for the Virginia Lottery to regulate skill game machines. HB 1272 and SB 661
Fairfax Casino: Adds Fairfax County to the list of localities that may host a casino facility. SB 756
The General Assembly adopted an assortment of proposals initiated by Governor Spanberger, who ran and won her 2025 election on an affordability agenda. A sample is below.
Affordable Housing—
- Housing Revolving Loan Fund: Establishing a new state program to incentivize mixed-income housing. HB 820 and SB 490
- Religious and Tax-Exempt Property: Providing for by-right housing on property owned by religious and certain tax-exempt nonprofit organizations. HB 1279 and SB 388
- Rental Agreements: Increasing the mandatory waiting period for a landlord to pursue remedies regarding termination of a rental agreement from five days to 14 days. HB 15 and SB 48
Health Care—
- Administration of Nursing Scholarships: Granting the Virginia Health Workforce Development Authority the authority to administer nursing scholarships. HB 815 and SB 405
- The Affordable Care Marketplace: Appropriating state general funds to subsidize higher premium costs resulting from HR 1.
Energy—
- Energy Efficiency Upgrades: Requiring Dominion Energy Virginia and Appalachian Power to attempt to provide by December 31, 2031, prescriptive efficiency improvements to at least 30 percent of qualifying households as defined in the bill. HB 2 and SB 72:
- Income-Qualified Energy Efficiency and Weatherization Task Force: Establishing the Task Force to determine barriers regarding access and enrollment to the current energy efficiency programs for income-qualified energy customers: HB 3 and SB 5
- Regional Greenhouse Gas Initiative: Rejoining the agreement – a market-based “cap and invest” program. Former Governor Glenn Youngkin withdrew Virginia from the agreement. The program funds weatherization / housing and flooding programs: HB 397 and SB 802
Kemper Consulting will continue to report on key legislative events, including the development of the 2026-2028 biennial budget. As always, we will be in touch with clients regarding specific issues and don’t hesitate to reach out with questions and comments.