Utah data centers promise jobs and revenue, but opponents say benefits disappear
Debates are escalating in Utah over the economic benefits of data centers, with residents in Box Elder County actively challenging projects like the Stratos data center over concerns about job creation, property tax volatility, and rising electricity costs. State officials continue to promote data centers, citing revenue and job projections, while academic research highlights potential downsides and policy challenges for rural communities.
The Deseret News reports on the growing divide in Utah over data center development, with residents and researchers challenging claims of significant economic benefits while state officials highlight job creation and revenue. Brenna Williams, co-founder of the Box Elder Accountability Referendum (bear), a group opposing the proposed Stratos data center in Hansel Valley, Box Elder County, views economic promises as "smoke and mirrors" and raises concerns about electricity bills and property tax stability.
University of Southern California associate professor Shon Hiatt presented research to the Economic Development and Workforce Services Interim Committee, indicating that investor-owned utilities like Rocky Mountain Power initially absorb data center electricity demands without raising consumer prices, unlike non-investor-owned utilities. However, Hiatt cautioned that this trend might not continue with larger data centers.
Maddy Oritt, director of public finance research at the University of Utah, found that while data centers initially lower local property tax rates due to "new construction," the rapid depreciation of personal property (servers) leads to tax rate volatility. Her study modeled a $1 billion valuation dropping to $70 million in five years, requiring rates to "creep back up." Despite this, she believes rates would not exceed pre-data center levels.
Lance Soffe, senior vice president of economic growth for the Governor’s Office of Economic Development, touted the benefits of data centers, projecting $344 million in state revenue and 106 high-paying jobs for the future Creekstone Energy Project data center in Millard County. He emphasized post-performance tax incentives, which offer higher rebates for rural developments, as a strategic tool for economic growth, acknowledging that such incentives are more beneficial in rural areas without existing large employment centers.