Whenever big data center developers roll into town, their pitch ends up sounding something like this: hand over your land and your resources, throw in a decade of government subsidies, and we’ll give your ailing little burg some jobs, tax revenue, and a shiny new facility to boost the local economy.
Sounds like a no-brainer, right? Not so fast, cowboy.
In theory, more tax revenue means money for schools, roads, and first responders. In practice, states and counties are waving those taxes in order to entice tech companies to set up shop — while existing campuses put major strain on local communities. One analysis found that Georgia, Virginia, and Texas each lose over $1 billion a year to state data center incentives, while at least fourteen states don’t even disclose data center tax breaks in the first place.
The down-stream impacts don’t really materialize either. Researchers at Georgia Tech found that in rural areas, data centers typically employ fewer than 100 permanent workers and are likely to import specialized services from outside the community.
While this can temporarily boost unemployment numbers, any broader, long-term impacts are not guaranteed and are highly dependent on local conditions. As the Georgia Tech researchers explain, “the sweeping job and wage growth often promised during local recruitment efforts is unlikely to arrive on its own.”
So why are these towns waiving taxes? The whole idea for a town to welcome a data center is to gain tax revenue not waive it.