NY lawmaker wants to cap or ban tax breaks for data centers

New York lawmakers are increasingly challenging data center developments, spurred by a massive proposed $1.46 billion subsidy package for a Stream Data Centers campus in Genesee County's STAMP industrial park, located in the Town of Alabama. Syracuse-area State Sen. Rachel May has introduced a bill, the 'stop subsidizing data centers act,' which aims to cap tax breaks for mid-sized data centers and outright ban them for large facilities. May emphasized that data centers, as heavy energy users, should not receive low-cost, NYPA-provided power, and that communities need to be more careful about what projects they welcome. Separately, State Sen. Liz Kreuger, representing Manhattan, has proposed a three-year statewide moratorium on data center construction to allow for the development of better regulations and policies. Governor Kathy Hochul has also entered the debate, initiating a Public Service Commission review to ensure data center developers are held accountable for energy infrastructure upgrade costs, preventing them from being passed on to consumers. The proposed Stream Data Centers facility itself, a 2.2-million-square-foot project, is expected to use 500 megawatts of electricity and create 125 permanent jobs, with the Genesee County Industrial Development Agency (IDA) proposing a $1.43 billion sales tax abatement and a $31 million mortgage tax break. Earl Wells III, a spokesperson for the Genesee County IDA, defended the subsidy, arguing that despite fewer permanent jobs, the project would bring significant revenue to local governments over its 30-year lifespan, including funds for water infrastructure upgrades. The IDA board has not yet scheduled a vote on Stream's subsidy package. Advocacy groups like Reinvent Albany and the environmental coalition NY Renews support increased accountability and restrictions, with Ryan Madden of NY Renews calling data centers antithetical to climate goals due to their high power demands. Despite the state budget delays, Albany observers anticipate legislative action on data centers this year, though the specific outcome remains uncertain.