The Hidden Cost of Billion Dollar Data Center Deals

The Center Square's "Everyday Economics" podcast, hosted by Chris Krude and economist Oorfaay Dwaangi, discussed the economic reality of billion-dollar data center deals, questioning their true benefit to taxpayers. The episode, aired April 13, 2026, highlighted that states across the U.S. are offering substantial tax incentives, often reaching hundreds of millions of dollars, to attract data centers and other large-scale tech infrastructure. Louisiana was cited as an example, having restructured its economic development strategy around such investments. Dwaangi explained that states engage in this practice due to competition for investment and the short-term focus of election cycles, often leading to inflated benefit projections. He argued that these policies "pick winners and losers" and suggested that broad tax policy changes for all businesses would yield better results. Krude drew parallels to stadium deals, which historically failed to deliver promised returns for taxpayers, questioning if data centers were different in terms of long-term economic benefit or employment. While acknowledging data centers contribute to building infrastructure for the "new world" of AI, the hosts concluded that the economic math often "doesn't add up." They noted that construction jobs are temporary, and data centers are capital-intensive, not typically creating many long-term jobs for locals. Dwaangi speculated that many data centers would be built regardless of incentives, as companies are actively seeking land, and offering tax breaks often creates "a big hole in your budget." The discussion underscored the importance of local reporters asking critical questions about whether such deals would have happened anyway and if their structure truly benefits taxpayers.