Texas Governor Abbott Calls for Prohibition of AI Data Centers in Rural Areas, Elimination of Tax Breaks
Texas Governor Greg Abbott has called for stricter regulations on AI data centers, advocating for their prohibition in rural neighborhoods and the elimination of state sales tax incentives. This stance follows criticism from Democratic gubernatorial candidate Gina Hinojosa regarding his previous support for data center tax breaks, which have amounted to billions of dollars. The governor plans to push for these changes in the upcoming legislative session.
Governor Greg Abbott of Texas has intensified his stance against AI data centers, calling for their prohibition in rural Texas neighborhoods and the elimination of state sales tax incentives. Speaking at a re-election campaign rally in Bullard, Texas, Abbott aligned himself with "East Texas values," asserting that data centers seeking to build in the state must bring their own funding, power, and water, and contribute to reducing electricity costs for residents. He pledged to work with lawmakers to pass these proposed regulations and revoke existing tax breaks during the next legislative session in January.
Abbott's comments followed criticism from Democratic gubernatorial candidate State Representative Gina Hinojosa, who accused him of previously creating "the biggest data center giveaway" in the country, benefiting wealthy donors. Hinojosa argued that these data centers are driving up electric bills and consuming excessive water, with taxpayers footing the cost.
According to the Texas Comptroller's Office, state taxpayers have granted nearly $2.8 billion in sales tax breaks to data centers between 2014 and the current year, with projections indicating this figure could reach $3.2 billion over the next two years due to numerous proposed projects. Both Democratic and Republican sentiments in rural Texas have increasingly turned against data center developments, making this a significant political issue.