Data Center Moratoriums Criticized for Harming Rust Belt Economic Revival
New York Governor Kathy Hochul signed a one-year moratorium on new data center developments, impacting the author's hometown of Oswego. This is part of a national trend with over 10 states proposing similar bills and 116 local moratoriums enacted. The author argues these moratoriums, driven by outdated concerns, are sabotaging economic growth and US competitiveness, citing positive data center impacts in Louisiana, Mississippi, and Washington.
The Washington Examiner published an opinion piece by Quinten Denkenberger, a policy fellow at NetChoice, criticizing widespread data center moratoriums across the United States. Denkenberger highlights New York Governor Kathy Hochul's executive order imposing a one-year moratorium on new data center developments, specifically noting its detrimental impact on his hometown of Oswego, a historically underinvested Rust Belt community. This action reflects a broader trend, with over 10 states proposing similar legislation and at least 116 local moratoriums enacted nationwide, alongside a proposed federal AI Data Center Moratorium Act by Senator Bernie Sanders.
The author argues that these moratoriums, often fueled by outdated concerns about electricity demand, water usage, and job creation, are misinformed. He contends that modern data centers are addressing these issues and, crucially, provide significant economic benefits. Denkenberger cites examples such as Meta's data center in Richland Parish, Louisiana, which contributed $22.4 million in taxes and doubled sales tax revenue, enabling substantial bonuses for local teachers.
Similarly, Amazon's $25 billion investment in Madison, Warren, and Hinds counties in Mississippi has created 2,000 jobs and improved local infrastructure, with Amazon covering $300 million in power grid upgrades. Further, the article points to Quincy, Washington, as a "data center boomtown" where poverty rates dropped significantly after Microsoft and Yahoo established data centers in 2007, leading to a renovated high school, new medical center, library, and fire station funded largely by data center tax revenue. Denkenberger concludes that such blanket moratoriums harm potential host communities, undermine U.S. competitiveness in the AI race against China, and prevent essential infrastructure and economic redevelopment.