The biggest casualties of the growing number of data center moratoriums are not large tech companies, but rather public schools that will have fewer resources and homeowners who will pay higher property taxes.
Tech companies have many options for where to locate and build data centers in this massive country. They remain welcome in many places because of their compelling track record of positively transforming the communities where they operate and tech companies’ willingness to sign binding legal agreements to do the same for decades more.
It is one thing for towns or counties to decide they do not want a data center, based on land-use policies and the community’s vision. Right or wrong, local elected officials are accountable for those decisions.
Top-down statewide moratoriums, or even a potential national one as Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez are now calling for, are especially onerous. Recent developments in New York show why.
On July 14, New York Gov. Kathy Hochul issued an executive order imposing a one-year statewide moratorium on data centers requiring more than 50 megawatts of power. This is bad news for Genesee County, in upstate New York, which has been eagerly awaiting a new data center. The county’s economic development agency championed the project, noting it would mean $1.3 billion in new wages, $286 million in increased funding for municipalities and schools, and $268 million for electrical infrastructure improvements.
After Hochul’s decision, those anticipated funds are uncertain at best. The loss of the funds would be a gut punch for taxpayers who pay $30,173 per pupil in K-12 public education in Genesee County, according to the Empire Center for Public Policy.
At the other end of the spectrum is Loudoun County, Virginia, which has the highest concentration of data centers in the country. Loudoun has cut its property taxes each year for the past 10 years, built a bevy of new schools and facilities, and spends $23,825 per pupil, 35 percent more than the national average of $17,619.
Loudoun County’s adopted fiscak 2027 budget includes $879 million in tax revenue from computer equipment in data centers, a 10.6 percent annual increase, with total data center taxes to the county of $1.2 billion. With two decades of data center growth, Loudoun has maintained its pastoral character and remains a destination for many throughout the United States who want good jobs and a better quality of life.
On July 6, Virginia Gov. Abigail Spanberger had a diplomatic yet clear warning for those in her state pushing for a moratorium: back off. She said, “What do we tell the localities that get 50 percent of their local revenue from data centers? … We have entire communities where the school, the libraries and the fire station is principally being funded because of” data centers.
Elsewhere, a Louisiana school district announced in June that some teachers will receive bonuses of more than $50,000 this year because of a data center. In Missouri, Gov. Mike Kehoe announced on June 15 that a new Amazon data center in Montgomery County means “hundreds of millions of dollars in new property tax revenue over the next 25 years.”
The Mississippi Economic Development Council reports that data centers “are projected to generate hundreds of millions of dollars annually for the local taxing authorities, providing services for civic, school and government services.”
Columbia County, Georgia, is working to substantially reduce residential property taxes and replace them with payments from two Google data centers, according to County Commission Chair Doug Duncan.
Nationwide, the data center industry — data centers and their supply chains — paid $204.4 billion in local, state and federal taxes in 2024, according to a May 2026 report from PwC. That represents a 24 percent increase from 2023. Given the recent surge in data center construction, the figures will be much higher for 2025-26. And with trillions of dollars in additional investments in data centers expected through 2030, the benefits for schools and other community needs will rise sharply.
The property tax relief that data centers provide cannot come soon enough. The Tax Foundation reports that since 2020, property tax values have increased 27 percent faster than inflation. Property tax rates are often not reduced even when property values rise sharply. This large, must-pay bill directly and significantly affects affordability.
It has never been more important for companies looking to build data centers and the community leaders supporting them to clearly state the benefits to students, teachers and taxpayers. Proponents should also challenge those supporting moratoriums or opposing projects to explain why people, instead of tech companies, should be burdened with substantial tax payments.
Paul Steidler is a senior fellow with the Lexington Institute, a public policy think tank in Arlington, Va. He wrote this for InsideSources.com.
