'Enormous subsidies': Tax breaks for Kentucky data centers raise alarm
Kentucky expanded tax exemptions for data centers a year ago, leading to rapid development. A progressive think tank estimates these exemptions could cost the state over $1 billion in sales tax revenue. Legislation aimed at protecting ratepayers from rising electricity costs and addressing non-disclosure agreements with developers failed to advance.
One year ago, the Kentucky legislature expanded tax exemptions for data centers, attracting rapid development across the state. The Kentucky Center for Economic Policy, a progressive think tank, estimates that these exemptions could easily cost the state over $1 billion in sales tax revenue, a sum larger than the funding for all public universities and colleges or K-12 public schools. The incentives bill advanced with almost no public mention or debate, with some lawmakers admitting they had insufficient time to read and assess the legislation before it was approved by the Republican-dominated General Assembly.
This year, several legislative efforts concerning data center impacts failed to pass. A bipartisan bill, led by Republicans, aimed at protecting ratepayers from rising electricity costs did not clear the Senate. Additionally, a Democrat-led bill targeting controversial non-disclosure agreements between data center developers and public agencies failed to advance from committee.