Wisconsin county considers 18-month hyperscale data center moratorium
Dane County, Wisconsin, is considering an 18-month moratorium on hyperscale data centers to allow time to study the complex issues involved. This follows a similar moratorium in Manitowoc County and a public meeting in Madison regarding its own one-year moratorium. The state's sales tax exemptions for data centers, which benefit major tech companies, are also part of the discussion, drawing criticism for special treatment.
Wisconsin's Dane County Board is deliberating an 18-month moratorium on hyperscale data center developments, including applications and zoning permits. The county board, which will vote on the proposal on June 4, stated that the pause is necessary to research the intricate challenges posed by these projects, following growing concerns that communities might receive new proposals before adequate policy decisions can be made. Dane County Board Chair Patrick Miles emphasized that the moratorium would provide crucial time for informed, data-driven policymaking.
This move comes after Manitowoc County enacted a similar 18-month moratorium in late April, and the city of Madison is also holding a public meeting regarding its own one-year data center moratorium. The discussions are set against a backdrop of significant state-level tax incentives for data centers. The Wisconsin Legislative Audit Bureau reported that the state is projected to forgo $1.5 billion in sales tax during the initial construction phase of four data center projects, with an additional $369 million annually once they are operational.
These exemptions, enacted in the 2023-25 budget, cover various aspects from property and computer servers to energy and cooling systems. Major companies benefiting include Microsoft with $20.6 billion in Wisconsin data centers, and a $15 billion joint investment by OpenAI, Oracle, and Vantage Data Centers in Port Washington. Other projects by Epic Hosting in Verona ($347 million) and Meta in Beaver Dam ($1 billion) are also included, with many utilizing tax increment districts for additional property tax recovery.
Economist JC Bradbury criticized the special tax treatment afforded to data centers, arguing that the "pushback" and "harsh blowback" against these projects stem from the industry's pursuit of "rent-seeking spoils" and "bogus economic promises" rather than inherent negativity towards data centers. Bradbury advised the industry to adopt a new public relations strategy by embracing "normal capitalism" instead of relying on "crony capitalism" and requesting special handouts.