Governors shift stances on data centers amid public backlash and midterm elections
Governors in several US states are shifting their stances on data centers, proposing or enacting stricter regulations on permits, water use, and electricity consumption. This change is driven by growing public opposition to the energy-intensive facilities, impacting upcoming midterm elections. Notable actions include new standards for tax exemptions and temporary bans on data center development.
Governors across the United States are increasingly scrutinizing data center development, driven by public backlash over their high energy and water consumption, particularly as midterm elections approach. Pennsylvania Governor Josh Shapiro, a Democrat, announced that his administration would no longer prioritize data center projects for construction permits or grant them tax exemptions unless they meet new standards, including full electricity cost payment, water use limits, and local outreach. Shapiro's move comes amid pressure from his GOP opponent, Stacy Garrity, as communities statewide express discontent.
Similarly, Texas Governor Greg Abbott, a Republican, has ordered regulators to prevent data centers from increasing electricity bills for Texans and has pledged a legislative agenda for next year to impose new regulations and potentially revoke tax breaks. Both Shapiro and Abbott, who previously supported data center recruitment, have shifted their positions due to growing opposition, which often cites concerns over lost open space, strain on resources, noise pollution, and dwindling water supplies. This trend is also seen in other states.
In Arizona, Democratic Governor Katie Hobbs secured a three-year moratorium on sales tax exemptions for data centers. New York's Democratic Governor Kathy Hochul ordered a one-year ban on large data centers to establish environmental and energy grid protections. Illinois Governor JB Pritzker, a Democrat, halted sales tax exemptions until stricter operational standards are imposed. Even gubernatorial races in Ohio and Wisconsin feature candidates proposing tougher data center regulations or debating moratoriums, highlighting how the issue has become a political battleground.