Week 7 Update — A $3 Billion Expansion — And What It Means for Virginia

Dear Friends,

This week the Senate voted on its version of Virginia’s two-year budget. After careful review, I voted no.

Budgets are never all good or all bad. There are always provisions worth supporting. The real question is whether the overall direction is sound — and whether the elements you oppose outweigh the ones you support.

This year, they did.

Three Budgets — Three Different Directions

This year we effectively considered three budgets:

1. Governor Glenn Youngkin’s introduced budget in December — a responsible plan I would have supported. It maintained fiscal discipline, included tax relief such as eliminating taxes on tips and overtime, and avoided dramatic expansion of long-term government commitments.

2. The House amendments, which added roughly $2 billion in additional spending compared to the Governor’s proposal and funded many Democratic priorities.

3. The Senate amendments, which added approximately $3.1 billion in net revenue increases, nearly a 10% increase over the introduced base.

It was the Senate version that came before us this week — and that scale of expansion made it impossible for me to support.

What Was Good — and Why It Wasn’t Enough

There were provisions in the Senate budget that I supported:

• A 3% teacher pay raise (passed 40–0 — I voted yes)
• An increase and extension of the standard deduction (40–0 — I voted yes)
• A one-time tax rebate (40–0 — I voted yes)

Those are positive steps.

But they were paired with structural changes and major revenue increases that move Virginia in a different direction.

The Senate budget reflects a deliberate decision to increase taxes and grow government at a substantial rate. That is not the direction I believe Virginia should take.

Legislative Pay — The Wrong Signal

Included in the Senate amendments was a near tripling of legislative pay — from $18,000 to $50,000 per year.

Public service is exactly that — service. At a time when proposals to eliminate the grocery tax and the car tax were rejected, dramatically increasing legislative salaries sends the wrong message.

Data Centers — Growth Follows Competitive Tax Policy

One of my deepest concerns is the elimination of the sales and use tax exemption for data centers.

Virginia became the global leader in data center investment because we adopted a stable, competitive tax structure that encouraged long-term capital investment.

Lower, predictable taxes encourage economic growth. That principle has been proven here. The exemption helped attract billions in private investment, strengthen our technology sector, and generate enormous local tax revenue.

Now that success is beginning to spread beyond Northern Virginia.

For years, data center development was concentrated in one region. Today, rural counties are finally positioned to compete for and attract this investment. A single data center campus in a rural locality can profoundly transform a county’s tax base — stabilizing tax rates, funding school construction, strengthening public safety, and reducing pressure on homeowners.

That kind of opportunity is rare.

Eliminating the exemption sends a message that Virginia is willing to change the rules midstream. Investment capital is mobile. Other states are aggressively competing for these facilities.

If we raise taxes on this sector, future investment will go elsewhere — and rural Virginia will lose the economic growth that is just beginning to reach it.

We should be expanding opportunity, not undermining one of the Commonwealth’s strongest engines of growth.

Key Floor Votes — Competing Visions on Taxes and Spending

There has been a great deal of rhetoric about “affordability.” On the Senate floor, we had clear votes on competing approaches.

Eliminate the Car Tax & Make Localities Whole
19 Republicans voted yes.
21 Democrats voted no.
I voted yes. It failed.

Eliminate the Grocery Tax & Make Localities Whole
19 Republicans voted yes.
21 Democrats voted no.
I voted yes. It failed.

Preserve Tax Relief on Tips and Overtime
Governor Youngkin’s introduced budget included this relief.
Senate Democrats removed it.

New Employer & Employee Payroll Tax
21 Democrats voted yes.
19 Republicans voted no.
I voted no. It passed.

Reinstate Carbon Tax (RGGI – Regional Greenhouse Gas Initiative)
21 Democrats voted yes.
19 Republicans voted no.
I voted no. It passed.

Remove the College Tuition Cap
21 Democrats voted to repeal it.
I voted to keep the cap.

New 11% Tax on Guns and Ammunition
21 Democrats voted yes.
19 Republicans voted no.
I voted no. It passed.

If we are serious about affordability, eliminating the car tax and grocery tax would have delivered immediate relief to Virginia families. Those proposals were rejected.

Redistricting Referendum — Partisan Gerrymandering at Its Worst

Early voting begins Friday, March 6.

In 2020, Virginians voted by a two-to-one margin to take partisan politics out of redistricting and enshrine protections in our Constitution. That vote was clear and decisive.

What is being proposed now reverses that decision.

This is partisan gerrymandering at its worst.

Democrats have openly celebrated maps designed to produce a 10–1 congressional delegation — that’s 10 Democrats and 1 Republican — in a state where statewide elections are often closely divided. That is not balance. That is not competition. That is politicians selecting their voters instead of voters selecting their representatives.

Even more troubling, maps were circulated by Democrat map drawers with specific names attached to particular districts — signaling which candidates the lines were drawn to favor. When districts are crafted with individual candidates in mind, the process is no longer about representation. It is about predetermining outcomes.

Virginians rejected that approach in 2020.

Now we are being asked to suspend the very constitutional protections voters demanded just a few years ago.

I strongly encourage you to vote early beginning March 6 and encourage friends and family to vote as well.

There are still negotiations ahead between the House and Senate before a final budget reaches the Governor. I will continue fighting for lower taxes, reliable energy, fiscal discipline, economic growth, and constitutional protections for Virginians.

As always, I appreciate the privilege of serving you.

Sincerely,

Mark Obenshain 

Virginia State Senate