New York paused AI data center development for a year. In the interim, lawmakers want to block tax breaks
New York Governor Kathy Hochul enacted a one-year moratorium on hyperscale data center permits, directing state regulators to study their environmental impacts, while state lawmakers push for more stringent regulations and a ban on tax incentives for data centers. This statewide pause impacts potential projects, including one by Stream U.S. Data Centers in Genesee County, which faces ongoing opposition from the Tonawanda Seneca Nation and environmental groups.
New York Governor Kathy Hochul signed an executive order on July 14, implementing a one-year moratorium on issuing state permits for hyperscale data center construction. This pause aims to allow state regulators to assess the environmental impacts of data center development and operation, specifically on energy demand, water use and quality, and air quality. The order covers data centers consuming over 50 megawatts and temporarily blocks projects like a potential development in Lysander.
However, environmentalists and state lawmakers, including Senator Rachel May (representing the 48th Senate District including parts of Onondaga County), argue that the executive order does not go far enough. They advocate for more stringent, possibly permanent, restrictions due to concerns about data centers' strain on the electric grid, water resources, and utility bills. The State Legislature had previously passed a more comprehensive bill, the "Responsible Data Center Development Act," which would pause permitting for facilities over 20 megawatts and mandate reviews of impacts on electronic waste, farmland, and public health.
Significant local opposition continues against a proposed 2.2 million square foot data center by Stream U.S. Data Centers in Genesee County, which has been offered $1.46 billion in tax subsidies by the Genesee County Economic Development Center. The Tonawanda Seneca Nation, whose sacred Big Woods natural preserve abuts the project site, is actively resisting the development. Ryan Madden, Indigenous solidarity director for NY Renews, supports these local efforts and sees the moratorium as a crucial window for organized resistance.
Lawmakers are also targeting financial incentives for data centers. Governor Hochul has expressed support for a proposal to ban state industrial development agencies from offering tax breaks. Senator May introduced the "Stop Subsidizing Data Centers Act," which would cap financial incentives at $25,000 per anticipated full-time job and deny assistance for projects over 20 megawatts, arguing that data centers create few long-term jobs and are a poor investment of taxpayer money.