Key facts
- Governors are facing increasing pressure regarding data centers due to public backlash.
- Pennsylvania Gov. Josh Shapiro will no longer prioritize data center projects for permits or tax exemptions without meeting new standards.
- Texas Democratic challenger Gina Hinojosa is using data center concerns in an ad against Gov. Greg Abbott.
- Concerns about data centers include energy consumption, water use, noise, and impact on local communities.
- Several governors, including those in Arizona, New York, and Illinois, have implemented or proposed stricter regulations or moratoriums on data centers.
Governors across the United States are increasingly navigating public opposition to data centers, a trend that is significantly influencing political races, particularly for gubernatorial seats. As the midterm elections approach, candidates are leveraging growing discontent over the environmental and economic impacts of these large, energy-intensive facilities.
In Pennsylvania, Governor Josh Shapiro announced that his administration will no longer prioritize data center projects for construction permits or tax exemptions unless they meet specific standards, including covering full electricity costs, limiting water usage, and engaging in local outreach. This move comes as his Republican opponent, Stacy Garrity, capitalizes on community revolts against proposed data centers.
Similarly, in Texas, Democratic challenger Gina Hinojosa released a television advertisement accusing Republican Governor Greg Abbott of favoring data center executives. The ad targets rural voters concerned about the perceived threat data centers pose to rural life, water supplies, and ranchland.
Historically, both Shapiro and Abbott had actively recruited data centers. However, Abbott has recently directed regulators to ensure Texans do not bear higher electricity costs due to data centers and has proposed legislative measures to regulate them, including eliminating state tax breaks.
Across the nation, local zoning and permitting boards have seen rejections of data center projects due to resident opposition. Concerns range from the loss of open space and rural character to the impact of diesel generators on quality of life and health, potential water shortages, and rising electricity bills. The proliferation of AI has led to the construction of data centers that are significantly larger than previous facilities, consuming energy comparable to small cities.
In Arizona, Governor Katie Hobbs secured a three-year moratorium on the state's sales tax exemption for data centers, labeling it a "corporate handout." New York Governor Kathy Hochul has implemented a one-year ban to allow for environmental and grid protections. Illinois Governor JB Pritzker has paused new sales tax exemptions pending tougher operational standards.
Even potential presidential contenders are taking note. Illinois Governor JB Pritzker has halted new sales tax exemptions for data centers until lawmakers impose tougher standards. In Ohio, both the Democratic and Republican gubernatorial nominees, Dr. Amy Acton and Vivek Ramaswamy, have presented distinct policies calling for stricter developer standards.
In Wisconsin, the Democratic nominee, David Crowley, narrowly defeated an opponent who campaigned on a data center moratorium. Crowley advocates for local veto authority while acknowledging potential economic benefits. His Republican opponent, U.S. Rep. Tom Tiffany, has criticized Crowley's stance, labeling him "Data Center David Crowley."