Gallego strikes middle ground on ‘necessary evil’ Arizona data centers

Arizona Sen. Ruben Gallego has adopted a pragmatic stance on data centers, labeling them a "necessary evil" essential for the country's AI advancements. However, he strongly advocates for discontinuing the state tax breaks these facilities currently enjoy, citing their high energy and water consumption, limited job creation, and visual impact on communities. The statewide tax exemption, enacted in 2013 to attract data centers, has proven costly, with the city of Phoenix losing over $12 million annually in revenue. Gallego, along with Phoenix Mayor Kate Gallego and Arizona Gov. Katie Hobbs, is calling for the repeal of these tax incentives. He argues that data centers should contribute more equitably, potentially by providing their own energy or compensating ratepayers, and that local governments should have greater control over their placement. The rapid proliferation of data centers, particularly in the Phoenix area, has fueled significant community backlash. Residents express concerns about massive, windowless facilities that consume substantial resources while offering few local jobs. Despite ongoing opposition efforts against projects like "Project Blue" in Tucson and a facility in Ahwatukee—with a Chandler project successfully blocked—a recent "Project Baccara" in Maricopa County, south of Surprise, received a military compatibility permit from the Maricopa County Board of Supervisors, despite loud community protests.