data center subsidies under fire
Governors across multiple US states, including New York, Nebraska, Arizona, Illinois, Oregon, and Massachusetts, are increasingly opposing data center subsidies. Critics argue these subsidies offer weak economic benefits, create noise and aesthetic issues, and strain water and electricity resources. This shift indicates a growing reconsideration of taxpayer handouts for data center development.
A growing trend among US governors indicates a turning tide against taxpayer subsidies for data center development. New York Governor Kathy Hochul has publicly opposed such handouts, joining governors in Nebraska, Arizona, Illinois, Oregon, and Massachusetts who have also taken action to eliminate them.
Pat Garofalo, author of the Boondoggle newsletter, argues that the justification for subsidizing data centers is weak. He points out that data centers require few permanent workers, offer minimal knock-on economic development, often negatively impact neighbors due to noise and aesthetics, and can increase costs for water and electricity across entire regions if not properly managed. This growing opposition reflects a broader re-evaluation of economic development strategies related to the data center industry.