The politics of data centers: How did Nevada get here?
The debate over data centers, their tax incentives, and their impact on water and electricity resources has become a key issue in Nevada's gubernatorial race. Democratic candidate Aaron Ford proposes to end tax breaks for data centers, citing concerns about resource drain. Governor Lombardo's administration has approved significant tax abatements, a policy initiated by a bipartisan bill in 2015.
The presence of data centers has emerged as a central issue in Nevada's gubernatorial election, a shift from a decade ago when their development was not a partisan concern. Local governments across the state are currently evaluating whether to approve more data centers, particularly if these facilities can ensure their own power supply.
Democratic gubernatorial candidate Aaron Ford stated his intention to halt tax incentives for all data centers if elected. He criticized current Governor Lombardo for providing over $200 million in tax breaks to data center companies, alleging that these facilities drain water, increase energy costs for consumers, and receive tax money to do so. Ford emphasized the need to prevent data centers from driving up electricity prices for residents and overusing water, noting that Southern Nevada already mandates water recycling for such facilities.
Nevada currently hosts more than 70 data centers either operational or under development. Tax abatements, approved by the Governor's Office of Economic Development (GOED), were established through a bipartisan bill in 2015. State tax records show these breaks escalated from $31 million in 2021 to $233 million in 2024, totaling approximately $330 million over the last four years. The 2015 legislation, co-sponsored by then-State Senate Minority Leader Aaron Ford and Republican State Senate Majority Leader Michael Roberson, extended tax breaks to new and relocating data centers that meet requirements such as investing at least $100 million and creating jobs. The original fiscal note for the bill did not foresee the subsequent data center boom.