What Is the AI Data-Center Land Rush?

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What’s in the rest of this article?

When you ask an AI chatbot a question, your phone does not do the work. A computer in another building does. That building is packed with computers, floor to ceiling. It is called a data center.

A large data center can use as much electricity as a small city. AI companies want many more of them, fast. So they are racing to buy land in American towns. That race is the land rush.

Each building needs four things: land, new power lines, water to cool the computers, and permission from the local government.

The industry says it pays its own way. Paperwork filed with the officials who set power prices can tell a different story. It can show costs that reach ordinary electric bills.

This article follows these buildings from the first land deal to the charge on a household bill. It covers who is building them, why some deals are signed under a company name that is not the real buyer, who pays when the power system has to grow, and what you can do when one is planned near your home.

The article has two parts on this page. Part 1 is about the buildings, the secrecy, and your power bill. Part 2 is about the tax money: what your town gives up to get one of these buildings, and what it gets back. You can read Part 1 and stop. There is also a separate article, Data Centers in Space, about the plan to put these buildings in orbit.

Read this first: people call it “the cloud,” but it has a street address. Every AI answer is made inside a building that is plugged into someone’s power grid.

Part 1 covers, in order:

What a data center is — and why the AI ones need so much more.
How it reaches you — your bill, your town’s water, and deals signed under other names.
Who really pays — the grid bills, the “temporary” gas plants, and what the filings show.
The change of subject — blaming foreign money for the protests, and the names you will keep seeing.
How to spot a sales pitch — what you can do, and where it already worked.
The common claims, answered — a short recap, and every source.

Part 1 · The Building

What is a data center — and why the AI ones are different

A data center is a building full of servers. A server is a computer with no screen and no keyboard. It sits on a shelf and does work for people far away. It runs websites, stores files, and answers AI questions.

When you ask a chatbot something, a machine in one of these buildings makes the answer and sends it to your phone.

Data centers are not new. They have been around for decades. What is new is AI. Training and running AI takes far more computing than running a website. More computing needs more electricity. More electricity makes more heat.

The article compares it to water. An ordinary data center is a bathtub filling from a faucet. An AI data center hooks the same tub up to a fire hose. It needs enormous amounts of power, nonstop, and lots of water to carry the heat away.

Companies are building them everywhere at the same time. So they all want the same three things: cheap land, big power supplies, and water for cooling. That is the land rush.

The deals can move faster than the people living nearby can find out what is coming.

From the road, the building looks like an ordinary warehouse. Inside, a large one uses as much electricity as a small city. That need for power and water is behind everything else in this article: the electric bills, the gas plants, the secrecy, and the fights over water.

Part 1 · Where It Lands

How this affects you

Every AI question runs in a warehouse that needs land, electricity, and water for cooling. These buildings are spreading fast. The cost of serving them can reach your home.

Cassandra Lainez lives in New Jersey. She used less electricity than before. Her bill went up by $29 anyway. “A $29 increase,” she said, “felt almost like a slap in the face.”

How can using less cost more? Picture a giant new customer that is plugged in all day. New power plants, substations and lines get built to serve it. If households are charged for them, you can turn off your lights, use less, and still pay more.

It is not only the power bill. Your town’s water and the air nearby are part of the deal too.

The way these deals are made can leave you watching from the side. A company with a made-up name buys the land, so you do not know who the real buyer is. Your own officials may have signed a promise to keep quiet. By the time you hear about the project, it can look already decided.

Many of the big decisions still happen in public rooms. Your local government decides about land and water. State utility regulators decide who pays for new power lines and plants. They decide it in a rate case, a public hearing where the power company asks permission to charge more, and anyone can speak.

Knowing where those decisions are made helps you judge what both sides tell you.

The last section of Part 1 is about what you can do. It gives you one question to ask and the meetings where you can ask it. It also names the two states that changed their power rules and the towns that voted to pause new projects.

Part 1 · The Secrecy

Fake company names, and the NDAs that gag your officials

Picture a shell company as an empty cardboard box with a harmless name printed on the side. The real owner stays hidden behind the box. That is one way a data-center deal can come into your town.

In Beaver Dam, Wisconsin, the company that signed the land deal was called Balloonist LLC. Behind it was Meta. Meta owns Facebook, Instagram and WhatsApp. It is one of the biggest companies in the world, and it builds AI data centers.

In St. Charles, Missouri, a plan for 440 acres showed up under the name “Project Cumulus.”

Some officials are allowed to know the real company. But first they may have to sign a non-disclosure agreement, or NDA. An NDA is a legal promise to keep a secret. It can stop them from naming the company or saying what the deal is.

NBC News looked at more than 30 of these proposals in 14 states. In most of them, local officials had signed NDAs. And they were dealing with what looked like shell companies. In Virginia, about 80% of the local governments NBC looked at had signed one.

That raises a fair question, without accusing anyone of anything: why would a government official sign a secrecy promise with a private company?

Put the steps together. A company nobody knows signs the papers. The public records show that name, not the real buyer. Officials promise to stay quiet. The land is tied up. By the time the public gets to speak, the important decisions have been made.

In one Virginia community, a public-records request showed 2,389 residents against an Amazon data center. Only 11 were for it. A public-records request is a written request asking a government office for copies of its files.

A resident told Bloomberg Television that the community was ignored. The 2,389-to-11 result was overridden anyway.

You live there. You pay the bills and breathe the air. And this way of making deals can make you the last person to hear about a decision that changes your town.

Part 1 · The Grid

Why a building you’ll never see can land on your bill

Electricity is less local than it feels. Your home and a data center 50 miles away can draw power from the same regional grid. The grid is one shared network of power plants and high-voltage lines.

Picture the grid as a town’s water pipes. Now add one customer who fills an Olympic-size pool, day and night. The old pipes may not be big enough anymore. In the same way, the power company may need new power plants, new long-distance lines, and new substations to carry the load.

A substation steps high-voltage power down to a level customers can use. Hooking up a huge new customer can mean building new substations and miles of new lines. That costs a lot.

Somebody has to pay for it. The power company asks state regulators for permission to get its money back through electric rates. The rate is the price you pay for each unit of electricity.

The regulators have three choices. They can send the bill to the data-center owner. They can spread it across all customers. Or they can split it. When the cost is spread, part of a project built for one private company can show up on your monthly bill.

That can happen even if the building is nowhere near your house, and even if you never use that company’s AI.

Sharing a grid can mean sharing the cost of making it bigger.

Part 1 · The Scale

Just how big are these? A Walmart versus a city

Picture two buildings that take up the same amount of ground as a Walmart.

The Walmart uses about 1 megawatt of power. That is roughly enough for a few hundred homes.

Ted Geisler is the president of Arizona Public Service, a power company called APS for short. He said a data center the same size can use 400 megawatts.

All the data centers asking for power could push APS to make about 50% more electricity. That much new electricity is enough for a whole big city. A campus is a group of these buildings on one site, and large campuses can reach hundreds or even thousands of megawatts.

CNBC made an even bigger comparison. It said one campus “running at the lower end of peak demand uses roughly the same amount of power as the population of San Francisco.” Demand from data centers is expected to grow 15–20% every year through 2030.

So, side by side: a Walmart uses about 1 megawatt. A data center the same size uses about 400 megawatts, according to Geisler at APS. A large campus uses about as much power as San Francisco, according to CNBC.

You may never go inside that building or use its AI. But no household gets a vote before a company and a power company plug a city-sized customer into the shared grid. If new plants and lines are needed, families can be charged to make room. Who pays that bill is a choice made by the people who set the rules.

Part 1 · Who Pays

“A business pays its own way.” So why is this on your bill?

A data center buys its electricity. So people say it “just pays market rates like anyone else.” That leaves out a much bigger cost: getting enough power to its door.

The article uses an apartment building to show it. A new tenant needs a private elevator. The tenant pays rent. Then the landlord splits the elevator bill among every apartment. The tenant pays the same rent as everyone else. That tells you nothing about who paid for the elevator.

A data center can force the grid to add a substation and run high-voltage wires for miles. State regulators decide where that bill goes: to the company, to all customers, or split between them. Regulators often let the power company collect at least part of it from everyone.

When that happens, the company gets the service and keeps its earnings. Your household helps pay for the new equipment, even if you never use that company’s AI.

So there are two questions, not one. Who caused the cost? And who pays it? They can be different people.

“It pays its own way, like any other business” is only true if its share covers both things: the electricity, and the equipment built to deliver it.

Paying for electricity is not the same as paying for the grid work you caused. When you hear “the data center pays its fair share,” ask which costs went to the project and which went to everyone else.

Part 1 · The Auction

How one building’s cost fans out across every household

PJM runs a yearly “capacity auction.” Power plants are paid to promise that electricity will be there when demand is highest. That price is then passed on to customers.

PJM’s grid serves about 65 million people in 13 states in the mid-Atlantic and the Midwest, plus Washington, DC. In one year, its auction price climbed from $28.92 to $269.92 per megawatt-day.

Data centers create much of the new demand. But the higher price is charged across the whole region, including to households that had nothing to do with it.

Monitoring Analytics is PJM’s independent market monitor, the referee. It said 63% of that increase was caused by data centers. That came to about $9.3 billion, collected from customers.

In the next auction, in December, data-center demand made up about 40% of the total cost: $6.5 billion out of $16.4 billion.

CNBC described the same event as “more than a 500% increase,” with about 60% tied to current and expected data-center demand. The percentages differ because each one was measured and rounded a different way. They all describe a price that went up by hundreds of percent, mostly because of data centers.

David Lapp is Maryland’s People’s Counsel. By law, his job is to speak for households in power-price cases. He said auction prices “went up by 800%,” and some bills rose “over $1,000.”

Then he asked: “Why should residential customers be responsible for costs being driven by some of the biggest and wealthiest corporations in the world?”

This is how Cassandra Lainez used less power and still paid $29 more. The extra charge came from demand somewhere else on the shared grid, not from anything she did at home.

Lapp calls that way of splitting the cost “fundamentally unfair.” A wealthy company can cause the cost, while you and your neighbors help cover $9.3 billion of it. That is a policy choice, and regulators can choose differently. Using less power does not protect you when someone else’s demand is spread across your bill.

Part 1 · The Turbines

The “temporary” gas plants going up next to real neighborhoods

When the grid cannot bring a data center enough power fast enough, the company can make its own by burning natural gas on the site. The people nearby get the exhaust and the noise, all day and all night.

That happened in Memphis, Tennessee. Reporting indicates that xAI, Elon Musk’s AI company, powered its Colossus supercomputer partly with gas turbines. It ran as many as 35 turbines on trailers. It called them “temporary,” so they could run without the usual air-pollution permits.

The NAACP, a civil-rights group, and the Southern Environmental Law Center filed a notice that they planned to sue. After that, xAI removed that first group of turbines.

A 2026 lawsuit now targets 27 more turbines, across the state line in Southaven, Mississippi. It was filed under the Clean Air Act, the main national law on air pollution.

Reporting counted 46 turbines running without permits in total. Together, they could be the largest source of smog-forming pollution in the 11-county Memphis area.

Mississippi regulators had called the machines “mobile” or “temporary.” In January 2026, the EPA confirmed that turbines like these do need construction and air permits. The EPA, the Environmental Protection Agency, is the national government office in charge of pollution rules.

Picture a whole gas power plant, cut into pieces, loaded onto trailers, and parked next to your neighborhood. Calling each piece temporary does not make the exhaust temporary when the machines run around the clock.

The company keeps the profit. The families nearby breathe the air, and they are disproportionately in a community that was given no real say. Civil-rights and environmental groups had to go to court to force the permit question.

One label, “temporary,” let dozens of turbines run beside homes without the permits other businesses must get.

Part 1 · The Diesel

The diesel sitting behind every one of these buildings

Gas turbines are what a company uses when the grid cannot feed it fast enough. Diesel is different, and more common. Diesel generators are the backup. They sit behind the building in case the power fails. Every data center has them.

In Northern Virginia, where these buildings are packed close together, that adds up to more than 4,000 diesel generators. Together they could produce over 11 gigawatts, more than Dominion Energy’s entire fleet of natural-gas plants. That is enough to power millions of homes, sitting idle.

Most of them are the cheapest kind, with no pollution controls at all. One Amazon permit, reviewed by the columnist Ivy Main, covers 173 generators at a single data center, burning up to ten million gallons of diesel a year.

A backup generator is supposed to sit and do nothing, and most of the time it does. But not all the time. Each one is run on a test schedule, and the exhaust from each test lands on whoever lives nearby. And in a grid emergency they do not take turns. They all start at once.

It is not only Virginia. In San Antonio this July, a company asked to run 32 diesel generators at one site. “Which would impact our air quality significantly,” said Ric Galvan, the city council member for that district.

Gas turbines get the news coverage. Diesel generators are at every one of these buildings.

Part 1 · The Fair Share

The claim that data centers already pay their fair share

The Data Center Coalition speaks for Amazon, Meta, Google, Microsoft and dozens of other data-center companies. It says its members “already pay their fair share for power.” It points to the money they invest, the construction jobs they bring, and the taxes they pay where they build. Those benefits are real.

The claim leaves out who paid for the grid costs. The PJM numbers showed it: 63% of one capacity-price increase, about $9.3 billion, landed on customers. The market’s own independent monitor said data centers caused it.

In Louisiana, energy analyst Ari Peskoe said a power company proposed a $3 billion to $4 billion power plant for a Meta data center. The data center’s 15-year agreement “only obligates them to pay for about half,” he said. That could leave “everyone else in Louisiana” paying for the rest.

Dominion, the power company, gave another warning. It projected average Virginia household bills “more than doubling to $315 a month… primarily due to data centers.”

There is no one national number for who pays. The terms change with each project, each power company, each state and each contract. “Households pay for all of it” goes too far as well. Companies pay real money for electricity and equipment, sometimes a lot. The fight is over the part left for everyone else.

Tyson Slocum, a consumer advocate at Public Citizen, argues the industry understates how much gets pushed onto customers. The coalition argues that the companies cover far more. Both are advocates. Neither is a neutral referee.

The split is decided deal by deal. So the useful question is not “do they pay?” It is: how much of the grid cost they caused gets spread onto households? Ask for that number at your state’s rate case, the hearing where the power company has to justify a price increase.

Part 1 · The Distraction

“China is behind the protests” — watch the subject get changed

When someone says China is behind the protests, the discussion stops being about who pays for the substation.

Kevin O’Leary is an investor from the TV show Shark Tank. He is promoting Wonder Valley, a planned data-center campus in Alberta, Canada. It is pitched as the world’s largest: 7.5 gigawatts and $70 billion.

In May 2026, he said the people opposing it had received “foreign-linked money, including interests connected to China.” He called that “an irrefutable fact.” Irrefutable means impossible to prove wrong.

The Washington Post and NPR checked. They found the evidence thin and unverified, which means nobody had shown it was true. The Alliance for a Better Utah, one of the groups O’Leary accused, challenged him to prove it.

A flat lie is easy to reject. A half-truth is more useful to someone selling something, because it sounds solid enough to steer you away. “Foreign money is behind the protests” can make neighbors who are defending their town look suspicious. Meanwhile, the substation question disappears.

Blaming a scary outsider to change the subject is used on every side of politics. When you notice it, it does not mean all news lies. It means someone is selling you something.

Part 1 · The Players

Names that keep showing up

These are the names that keep coming back, and what each one is.

Monitoring Analytics is PJM’s independent market monitor. It is the watchdog that polices PJM’s power market. It said data centers caused 63% of one capacity-price increase. It is a neutral, technical source, not an advocate.

Public Citizen is a consumer-advocacy group, which means it argues for customers. Its energy expert, Tyson Slocum, argues the industry understates what gets pushed onto customers.

The SELC and the NAACP. The Southern Environmental Law Center and the NAACP filed legal notices and lawsuits against xAI’s gas turbines near Memphis, which were running without permits.

Public Citizen argues for customers. The industry’s trade group, the organization that speaks for the companies, argues for them. Monitoring Analytics argues for neither side. That is why its 63% figure carries the most weight in this article.

Part 1 · The Four Tests

How to tell when you’re being sold

All four of these came up earlier in the article.

A company nobody has heard of, using a made-up project name, shows up on a local meeting agenda. Ask, on the record, who the real company is. Ask whether anyone signed an NDA.

“On the record” means said out loud at a public meeting, so it goes into the official notes.

Someone says it pays its own way. Ask which costs went to the company and which went to every customer.

“Temporary.” A machine that runs around the clock is not temporary. Ask what permit it has.

A scary outsider gets blamed. Ask what question people were discussing before the accusation came up.

Every number in this article has a link at the bottom. Open a link, read past the quoted line, and decide for yourself.

Part 1 · What You Can Do

What you can do, and where it already worked

Data centers are decided in rooms you can walk into. There are three.

Zoning. Zoning rules say what can be built where. Your local planning or zoning board is the earliest chance to change or stop a deal before it is signed. Bring numbers and put them on the public record. It is not a sure thing. Saline Township, Michigan, voted 4–1 against a $16 billion project. It was sued, and was “advised to settle.” To settle means to end a lawsuit by agreeing to terms instead of fighting it out in court.

The rate case. Every state has a utility commission that approves higher power prices. Nearly all of them take comments from the public, and you do not need a lawyer. Ask one question: will the grid upgrades for data centers be charged to a separate customer class, or spread across everyone who pays for power?

Your own people. When someone says the data center pays its own way, explain the difference between causing a cost and paying it. Share this free article. Hearings on power, water and air are happening now.

This has already worked. Maryland and Oregon made data centers a separate customer class, so the company gets the bill for the grid work it caused. More Perfect Union reported it, and Maryland People’s Counsel David Lapp confirmed it on the record.

Since then the fix has gotten sharper. It is called a large-load tariff. A tariff is a power company’s official price list. The plain version of this one is a minimum bill: if you ask the grid to hold a huge amount of power for you, you pay for that reservation whether you use it or not. It works like a deposit on a banquet hall. Book the room and you pay for it, even if half your guests never come. It stops other customers from paying for substations and power plants built for a project that shrinks or never opens.

The Tennessee Valley Authority, a power supplier owned by the national government, approved one in August 2026. From October 1, its data centers pay a separate rate: about 10% more on average, phased in over three years, plus roughly $1.5 million per megawatt committed up front. The TVA says the reason is to keep the cost of serving those buildings off households and existing businesses.

Part 1 · The Wins

Where towns have already pushed back

Towns have been voting to pause new projects until they know what they are agreeing to.

The Bipartisan Policy Center, a policy research group, counts 54 of those pauses that actually passed. It notes that almost none are permanent bans. They are freezes that buy time to write rules.

Other counts go past 200, because they include every active local effort, not only the ones that passed. Both numbers can be defended. They count different things.

In St. Charles, Missouri, residents pushed Project Cumulus to withdraw. That is the 440-acre plan that first appeared under a made-up name.

And in 2026, lawmakers introduced over 300 bills in 41 states about data-center costs, taxes, water, and transparency, meaning how open the deals have to be. That is almost double the year before.

Part 1 · The Claims

The common claims, answered

“A data center pays its own way, like any business.” Half-true. It does buy its electricity and bring in tax money. But getting enough power to its door can take new plants, lines and substations, and regulators often spread that cost over every household.

“Data centers raised electricity prices for households.” True. PJM’s independent market monitor said data centers caused 63% of a capacity-auction price increase of hundreds of percent. That was about $9.3 billion collected from customers.

“Temporary gas turbines need no permits.” False. In January 2026, the EPA confirmed that construction and air permits are required. xAI ran up to 35 near Memphis as “temporary,” and a 2026 lawsuit targets 27 more in Southaven, Mississippi.

“China secretly funds the protests.” Unsupported. Kevin O’Leary called it beyond dispute in May 2026. Reporters at two national news outlets checked and could not verify it.

Part 1 · The Recap

What you know now

Here is the whole thing, in order.

Companies are building computer warehouses as fast as they can. Each one needs a huge amount of electricity. One campus can use as much power as a good-sized city.

To feed them, the power company builds new lines, new substations, and sometimes a whole new power plant. That costs billions of dollars.

In a lot of states, the rules let the power company spread that cost across everybody’s bill. That is how a building you will never walk into ends up on the bill for your house.

Most of the deal is done before you hear about it. The land is bought under a company name nobody recognizes. Your own officials sign agreements that stop them from saying who is really behind it. By the time it is public, the terms are already written.

When people object, the subject gets changed. The protests get blamed on foreign money, and nobody has produced evidence that this is true.

None of that makes these projects a scam. They bring real investment and real tax money, and every deal has different terms. Some places have already changed the rules. Maryland and Oregon made data centers their own customer class, so the company gets its own bill instead of yours. Fifty-four towns voted to pause new projects until somebody explained the deal. One town got a project pulled completely.

Those decisions are made in public meetings that you can attend.

You get one question. It works at any meeting, and you do not need to know anything about electricity to ask it:

Who caused this cost, and who is being charged for it?

Ask it at your utility commission, your county board, or your planning commission. Bring the numbers from this article with you and say them out loud, so they go on the public record.

Part 1 · Continue

Continue to Part 2

Part 1 · The Receipts

Don’t take our word for it

Every number in this article has a source listed below. When accounts disagree, each claim stays attached to whoever made it. Projections, advocacy figures, industry statements, personal accounts, and unproven accusations are all labeled. Some figures can change, so check their dates.

You do not have to trust anyone here, including us. Open a link, read past the quoted line, and make your own call.

Part 2 · Start Here

What’s in Part 2?

Part 2 covers, in order:

The four kinds of “jobs” — and which one you are actually voting on.
Who pays — Virginia was told a million and a half dollars a year. It paid $1.9 billion.
Who profits — and what the tax break actually buys.
Who decided — including the five years before anybody checks.
What Texas found when it finally looked, in the words of the man who counts the state’s money.
What already worked — and the one room where you have a say.

Read this first: nobody voted for a rule that only five jobs are needed. It is in the law anyway. Every figure in Part 2 links to the page it came from.

Part 2 · The Trade

What the deal actually is

The building is a warehouse full of computers. It is where the websites you visit, the apps on your phone and the AI answers you ask for are actually made. Companies are building them everywhere at once, and each one has to go up somewhere.

To get one, your state usually gives up the sales tax on everything inside the building — the servers, the cooling, the generators — for ten years or more. That is where nearly all the money is.

Those machines are pulled out and replaced every few years. Each time, the new ones are tax-free too. So the tax break keeps paying out for as long as the building stands.

In return, your town is promised jobs.

Money the state does not collect still has to come from somewhere: another tax, or a service that does not get paid for. Your county makes up the difference.

Part 2 · The Promise

What were you actually promised?

The company tells your town how many jobs it will bring. It does not say what kind. The word “jobs” is being used for four different things, and only one of them is a permanent job in your town.

Construction jobs are real, and they end. The crews leave when the building is finished. Many were never local: specialist electrical and mechanical crews travel from site to site.

Vendor jobs belong to somebody else’s company. A vendor is a company that sells or services equipment. Its workers may be on site every day fixing machines, and none of them are on the data center’s payroll.

Multiplier jobs are not people. They are a model’s guess at work created somewhere else — at a supplier, at a restaurant. Nobody has to show that those jobs exist.

Facility staff are the technicians and operators who actually work in that building for the next twenty years.

Only that last group has to justify ten years of forgiven taxes. It is also the smallest of the four.

Ask which of the four they mean. If they cannot give you the four numbers separately, they do not have them.

Part 2 · Who Pays

Who pays for it?

You pay for it. It just does not show up on a bill you can argue with.

Virginia shows what this tax break becomes. When the state wrote it into law in 2008, its own tax department estimated it would cost about a million and a half dollars a year. Last year it cost $1.9 billion. That is roughly eight hundred times what the public was told, after adjusting for inflation.

Ten states are each losing more than $100 million a year this way. In Texas and Virginia, it is over a billion dollars a year, each.

Part 2 · Who Profits

Who profits?

The companies profit. And the tax break makes the least difference to them where the projects are biggest.

Dany Bahar and Greg Wright are economists, people who study how money and jobs move. They took about 1,500 data centers that were built and matched them against 52 that were announced and then canceled. Then they tracked jobs in those counties through 2024.

Their first finding: where these buildings go is decided by power, land and fiber. Fiber means fiber-optic cable, the glass lines that carry internet traffic at high speed. Tax rules do not decide it.

Then they measured the tax break against the building cost. Where the giant data centers are, the tax break is about 2% of the construction cost. Where the small ones are, it is 62%.

Put those together. In the biggest projects, which have the most jobs, public money is a small part of what the company spends. In the smallest ones, which have the fewest staff, public money pays for most of the construction.

Bahar and Wright also counted the jobs. A county that gets its first big data center gains roughly a hundred to two hundred jobs over ten years. Wages do not go up. House prices go up a few percent.

Part 2 · Who Decided

Who decided this without asking you?

State legislatures wrote these rules. A legislature is the group of lawmakers each state elects. A law it passes is called a statute.

In Missouri, Delaware and Maryland, the law asks for five jobs. Five is about the staff of a small dentist’s office. In exchange, the state never charges sales tax on hundreds of millions of dollars of equipment. Nobody campaigned on that number. It is in the statute.

In at least fourteen states, the public cannot find out what the program costs at all. Those states publish no figure for it.

Texas gave this tax break to 138 projects before it checked a single one. Then it approved 59 more while the first audits were still running. An audit is a check of whether someone did what they promised, using their own records.

The state hands the money over and looks at the promise five years later. So a company can collect for half a decade before anyone asks whether it did what it said.

None of that was hidden. It was written down in public. The meetings where it was decided were open to anyone who showed up.

Part 2 · The Audit

What happened when Texas finally looked?

In July, the Texas Senate’s finance committee sat down with the first audits. Twenty projects had come due. Six passed. Six failed outright. They had not kept even twenty or forty permanent jobs, depending on the size of the building.

Brad Reynolds told the senators what that meant. He is the chief revenue estimator for the Texas Comptroller. The Comptroller’s office collects and counts the state’s money, and a revenue estimator predicts how much will come in. That makes Reynolds the man whose job is counting the state’s money.

He said that failing to justify even 20 permanent jobs at one of these buildings shows how little employment really comes from them.

Minutes later, the industry’s trade group cited a study. It claimed data centers support more than 103,000 jobs in Texas, or 428,000 once you let them count jobs at other companies.

Donna Campbell, a state senator, asked why data centers were having problems getting 40 jobs if hundreds of thousands were created.

Reynolds spoke to the bigger number directly. In a tight labor market, he said, a worker hired at a site getting the tax break has usually just left another construction job. So the work moved instead of being added. His exact words:

“Those multiplier effects that these models advertise cannot come true. They just simply cannot come true.”

Part 2 · The Test

Would they have built anyway?

Reynolds was asked whether the industry would build in Texas without the tax break at all. He said:

“I think a large portion of the development would continue to come because it is just an economic and competitive necessity for these companies to do that.”

Reynolds was saying Texas is probably paying for something it would have gotten anyway.

Meanwhile the price keeps climbing. One company walked away from its certificate, the state approval that gave it the tax break, after its power deal collapsed. It was handed a bill for $5.6 million in back taxes, which are the taxes it had skipped and now had to pay. That is what one tax break is worth on one building.

The program’s cost has gone from about $15 million a year a decade ago to a projected $3.3 billion.

Part 2 · The Other Side

What does the industry say?

Their case is real. The North Carolina Chamber, a business group, reports that searches for data-center work have doubled since January. They are eight times what they were in early 2022.

Somebody builds the substation. Somebody pours the concrete pad the building sits on. The technical jobs pay well. And the construction work brings money into the town while it lasts.

Then their own article explains the gap between the sales pitch and the payroll: “local incentive agreements often require employers to post permanent positions regardless of how long individual roles actually last.”

An incentive agreement is the deal that gives a company a tax break in exchange for promises. So a permanent job can be permanent because the paperwork says so.

Part 2 · What Worked

What already worked

None of this goes through Congress. Every decision that matters here is made by a state utility commission, a county board, or a planning commission. All three changed something this year.

States changed who gets billed. Maryland People’s Counsel David Lapp confirmed the fix on the record. Maryland and Oregon created a separate customer class for data centers. A customer class is a group of customers that pays its own price. So a company that causes grid work gets the invoice instead of everyone else.

The Tennessee Valley Authority went further. It put data centers on their own rate: more for each unit of power, plus a large payment up front just to reserve room on the grid. That way, nobody else pays for a substation built for a project that shrinks or never opens.

States tied the money to the promise. Pennsylvania’s order now requires a legally binding promise, with penalties, before a permit is issued. Legally binding means a court can make the company keep it. The order puts the same conditions on the sales-tax break.

Jim Pillen, Nebraska’s governor, said why Nebraska now tells data centers to make their own electricity: so that Nebraskans do not pay for the extra power use.

Texas ordered its grid operator, the organization that runs the state’s power grid, to audit every project trying to plug in, and not to connect any that fails.

The fix that works is not a ban. The company that causes the cost pays the invoice.

Part 2 · Taking It Back

And the states started taking it back

Legislatures started taking it back. Twenty-five states filed bills to cut these subsidies. Eight passed something. Maine repealed its subsidies outright, which means it took them out of the law. More than three hundred data-center bills were filed across forty-one states, roughly double the year before.

And towns just stopped. Fifty-four voted to pause new data centers until somebody explained the deal. Almost none are permanent bans. They are towns saying: wait until somebody explains this to us.

One town did it without a fight at all. Gilroy, California voted 7–0 on the terms for the recycled-water system serving an Amazon data center. Amazon puts the construction money in up front. There are no tax breaks, no rebates and no incentives. Gilroy’s terms: you pay for what you use.

Twenty-five states, three governors and fifty-four towns all changed something this year.

Part 2 · The One Number

The one thing to ask

When a project is proposed near you, ask for one number:

Everything the public gives — the tax break, grants, public infrastructure, and grid costs pushed onto other customers — divided by the permanent local jobs somebody has actually verified.

Public infrastructure means things built with public money, such as roads, pipes and power lines. Verified means counted and checked, not guessed by a model.

Both numbers are public records, so your officials can be asked for both.

Say it at the utility commission hearing, the county board meeting, or the planning commission, whichever one is holding the vote. Those meetings are open to the public and usually have empty seats.

Part 2 · The Receipts

Don’t take our word for it

Every number in Part 2 is linked in the sentence that uses it. The list below says who each source is and which way it leans.

Two places where good sources disagree, so they do not surprise you later. The National Conference of State Legislatures counted 38 states offering these incentives in April. The Center on Budget and Policy Priorities counted 40 in August, in a different month and with a different method. On local pauses, the Bipartisan Policy Center counts 54 actually passed, while Governing reports more than 200 active, “according to some counts,” in its own words. Both are counting honestly. They are counting different things.

Every one of these pages was opened and read, not taken from a summary. If something here is wrong, tell us and it will be fixed in public.