Governors’ races are being increasingly buffeted by the politics of data centers
Governors across multiple US states are increasingly scrutinizing data center developments amid growing public backlash over their energy and water consumption. This political shift is impacting gubernatorial races as leaders propose and enact new regulations, tax credit changes, and moratoriums on data center projects. Concerns primarily revolve around environmental impact, strain on infrastructure, and the preservation of local character.
The politics surrounding data center development are increasingly influencing gubernatorial races across several U.S. states, as public opinion turns against the energy- and water-intensive facilities. Governors who once actively recruited data centers are now shifting their stances in response to community concerns.
Pennsylvania Governor Josh Shapiro, a Democrat, announced that his administration will no longer fast-track data center construction permits or grant tax exemptions unless projects meet strict standards regarding electricity costs, water usage, and community engagement. This move comes as Shapiro faces pressure from his GOP opponent, Stacy Garrity, and widespread community opposition to proposed data centers.
Similarly, Texas Governor Greg Abbott, a Republican, has ordered state regulators to take steps to prevent data centers from increasing electricity costs for Texans, even instructing them to halt projects until their work is complete. Abbott also plans to pursue a legislative agenda next year to impose new regulations and potentially eliminate the state's significant tax breaks for data centers. Democratic challenger Gina Hinojosa has used this issue in her campaign, accusing Abbott of favoring data center executives over rural communities.
Other states are also seeing significant policy shifts. Arizona Governor Katie Hobbs secured a three-year moratorium on the state's sales tax exemption for data centers, labeling it a "corporate handout." New York Governor Kathy Hochul imposed a one-year ban on large data centers to establish environmental and energy grid protections. Illinois Governor JB Pritzker halted new sales tax exemptions for data centers until stricter operational standards are enacted. Additionally, gubernatorial nominees in Ohio and Wisconsin are addressing data center policies, reflecting the growing political salience of the issue.