Source: Fortune
Summary
Illinois Governor JB Pritzker has paused state tax incentives for data centers after the state legislature failed to raise data centers’ electricity rates. Pritzker plans to push the issue during the veto session in mid-November. The move is in response to growing opposition to data centers, with over $64 billion in development projects delayed or canceled across the US due to community pushback. The pause won’t affect agreements entered into before July 1, and companies can still seek local tax relief support.
Our Reading
The numbers tell one story.
Pritzker’s order puts him at odds with organized labor, which supports the tax incentives for data centers. Climate Jobs Illinois, an umbrella group representing 15 unions, has called for the pause to be reversed. The group argues that the pause will send billions of dollars in investment and thousands of union jobs to neighboring states. Illinois has seen over $15 billion in investments from data centers, with the state providing almost $1 billion in tax incentives between 2020 and 2024.
The data center debate is heating up, with Ohio also pausing tax incentives for data centers on Wednesday. Governor Mike DeWine ordered a halt to a program offering tax breaks while a committee studies the economic impact of the projects.
The governor’s move is a calculated risk, as he seeks to balance the interests of data centers with those of local residents concerned about rising utility bills.
As the veto session approaches, Pritzker’s decision will be closely watched by data center investors, labor unions, and local communities.
Author: Evan Null
