What Is the Economic Impact of Data Centers? It’s a Secret.

North Carolina officials are grappling with the economic and environmental implications of generous state and local tax breaks for data centers, which currently cost the state $57 million annually and could escalate to billions. Governor Josh Stein urged his Energy Policy Task Force to reassess these incentives, initially enacted in 2010 and expanded in 2015, citing the unforeseen rapid growth and energy demands of the industry. The state Department of Revenue and Commerce Department highlight the significant challenge in evaluating the true economic benefits and costs due to data center operators' legal ability to withhold crucial financial details, including sales and use tax exemptions, and sometimes even electricity and water usage. Senator Julie Mayfield (Buncombe County Democrat) and Representative Pricey Harrison (Guilford County Democrat), both members of the energy policy task force, echoed concerns about the lack of transparency and the need to reconsider incentives. They suggested that the original goal of attracting data centers has been met. The NC League of Municipalities noted varying member opinions, with some seeing data centers as property tax boosts and others concerned about quality of life issues and property value impacts. The article specifically details Google's large data center in Lenoir, Caldwell County, which has seen a $600 million investment and a planned $1 billion expansion since 2007. Despite Google's substantial property tax contributions to Caldwell County, the precise number of employees and the facility's energy, water, and sewer usage remain confidential due to contractual agreements with local governments. This secrecy further complicates independent evaluations of the sector's overall impact.