NY Gov. Hochul says she wants to ban tax breaks for data centers
New York Governor Kathy Hochul announced her intention to ban tax breaks for large "hyperscale" data centers across the state. This proposal, which could be included in next year's state budget, targets facilities requiring 50 megawatts or more of electricity and aims to end state and local subsidies, including those from Industrial Development Agencies. The move follows an executive order imposing a one-year moratorium on state permits for new data centers.
New York Governor Kathy Hochul, speaking at a roundtable event in Kenmore, announced her intention to ban state and local tax breaks for large "hyperscale" data centers. She defined these as facilities requiring 50 megawatts or more of electricity and specified that the proposed ban would prevent New York's 106 Industrial Development Agencies (IDAs) from offering property, sales, and mortgage tax breaks. Governor Hochul indicated that this measure could be enacted through the state budget next year, following discussions with state lawmakers.
The Governor's proposal aims to end subsidies that she argues are unnecessary for profitable data center companies, which are already attracted to New York due to its cold climate, abundant water, and affordable land. This initiative builds upon a recent executive order that placed a one-year moratorium on state permits for new data centers. If implemented, the ban on tax breaks could affect projects such as the proposed Stream US Data Center in Genesee County, which has sought $1.46 billion in tax breaks, and the Riverview Innovation & Technology Campus in the Town of Tonawanda.
The plan has garnered support from advocacy groups like Allies of the Tonawanda Seneca Nation and Reinvent Albany, who contend that taxpayer money should not be used to subsidize wealthy developers and that the New York Power Authority should cease providing discounted power to high-load, low-yield businesses. Existing data centers, including H5 Data Centers in Lockport and TeraWulf's Lake Mariner in Barker, have already received millions in tax breaks and low-cost hydropower. Conversely, data center developers have expressed concerns that such restrictions could push them to develop projects in other states.