‘It’s a Money Loser’: Tax Breaks for Data Centers Are Under Fire

May 9, 2024

Bloomberg: ‘It’s a Money Loser’: Tax Breaks for Data Centers Are Under Fire

Officials in states across the country are increasingly questioning whether massive public subsidies given to data centers are worth it – or whether it’s time to rein them in, in part because they create so few jobs:

“In Georgia, where the Atlanta area is one of the fastest-growing data center hubs in the US, the state legislature passed a bill in March that would halt tax breaks for two years, so their impact on energy supplies and fiscal revenue could be analyzed. Governor Brian Kemp vetoed the measure on Tuesday, saying that the July start of the suspension would prove disruptive to investment plans and that it was only two years ago that the legislature voted to extend the subsidies.

A Democratic lawmaker in Virginia—the biggest hub for data centers in the US—is also pressing for restrictions. A report by the state comptroller estimated the state forfeited $750 million in tax revenue because of data center incentives in fiscal year 2023 alone.”

Good Jobs First spoke to Bloomberg about another big problem with the subsidies is the lack of transparency:

“There isn’t a general belief that information should be transparent,” says Kasia Tarczynska, a senior research analyst at Good Jobs First, a pro-union watchdog group. A 2016 analysis by the nonprofit found that data center subsidies cost governments nationwide about $2 million per job created.

Read the full story at Bloomberg.