Folks, I’m sipping my coffee and reading about the latest drama surrounding data centers, and I have to say, it’s getting interesting. More governors are shifting their stances or taking steps to squeeze data centers as the midterm elections near, and public opinion is turning against these energy-hungry tech giants. I mean, who wouldn’t be concerned about the massive server warehouses that are popping up everywhere, using more energy than small cities and threatening rural life, ranch land, and dwindling water supplies?
It seems like the backlash against data centers is enveloping races for governor in some of the nation’s biggest states and presidential battlegrounds. Pennsylvania Gov. Josh Shapiro, a Democrat, has announced that his administration will no longer give data center projects priority when it comes to issuing construction permits or grant them a lucrative tax exemption if they don’t meet certain standards. These standards include plans to pay the full cost of their electricity, limit water use, and mount a local outreach campaign in the community.
Meanwhile, in Texas, Democratic challenger Gina Hinojosa has released a TV ad accusing Republican Gov. Greg Abbott of “selling out” to data center executives and companies. The ad airs as Hinojosa has aggressively looked to exploit an undercurrent of discontent in rural, Republican strongholds over data centers’ perceived threat to rural life, ranch land, and dwindling water supplies. It’s a clever move, but I’m not sure if it’ll pay off in the end.
At one time, both Shapiro and Abbott had been cheerleaders for data centers and actively sought to recruit them. But in recent weeks, Abbott has ordered regulators to take steps to ensure Texans were not paying higher electricity bills because of data centers, even telling them to hold up projects until they complete their work. He’s also promised to push a legislative agenda next year to impose regulations on data centers, including taking away the state’s billion-dollar-plus annual tax break.
For much of the past year, a growing number of data center projects have met rejection in local zoning or permitting board votes across the US, as angry residents pack once-sleepy municipal meetings. Losing open space, farmland, forest, or rural character is a big concern, as is the damage to quality of life, property values, or health by on-site diesel generators kicking on or the constant hum of servers. Others worry that wells and aquifers could run dry or electricity bills will skyrocket.
Small, under-the-radar data centers have been around for decades, but the explosion of artificial intelligence chatbots has given rise to data centers that are larger than anything just about any town has ever seen. Some of them dwarf football stadiums and factories and use more energy than small cities. It’s no wonder that officials want centers to pay for their own electricity and limit water use. They’re also chafing at the rising tab for the sales tax exemption most states offer data centers.
In Arizona, Democratic Gov. Katie Hobbs got lawmakers to agree to slap a three-year moratorium on the state’s sales tax exemption for data centers. Hobbs called it a “corporate handout,” which is a pretty apt description if you ask me. New York Gov. Kathy Hochul, a Democrat seeking reelection, ordered a one-year ban on large data centers to give the state time to impose protections for the environment and its energy grid.
Shapiro isn’t the only potential 2028 White House hopeful to step up his criticism of data centers. Illinois Gov. JB Pritzker, a Democrat running for a third term, halted new sales tax exemptions for data centers there until lawmakers impose tougher standards on their operations. In Ohio, the Democratic and Republican nominees for governor each unveiled dueling data center policies that called for developers to meet tougher standards before being built.
In Wisconsin, the Democratic nominee for governor, David Crowley, narrowly defeated a candidate who made her call for a one-year moratorium on data center construction a centerpiece of her campaign. Crowley has taken a more nuanced approach, saying local communities must have veto authority, while also saying data centers are a part of the modern economy and could bring significant economic benefits to the state.
As I finish my coffee, I have to say that this whole data center debate is getting more and more interesting. It’s a complex issue with no easy solutions, but one thing’s for sure – the days of data centers getting a free pass are over. Now, let’s see how our politicians navigate this minefield and try to appease both the tech giants and the concerned citizens. And who knows, maybe they’ll even figure out a way to make data centers pay for their own electricity – wouldn’t that be something? 😊
Armchair patriot. Believes in the free market, cold beer, and that there’s always a guy named George behind every CNN segment.
Former remote-throwing champion turned #1 couch commentator on liberal panic in the media. Born in Texas (or so his mug says), he earned a degree in Fake Newsology & Beer Philosophy from YouTube University.
