4 ms·

No, it's exactly the truth: https://www.ncsl.org/fiscal/subsidizing-servers-how-states-are-competing-to-attract-data-centers https://www.ncsl.org/fiscal/subsid

No, it's exactly the truth: https://www.ncsl.org/fiscal/subsidizing-servers-how-states-are-competing-to-attract-data-centers https://www.ncsl.org/fiscal/subsidizing-servers-how-states-a... The legislatures are betting that the data centers stick around or bring in jobs. They won't. They think something that expensive must require a ton of jobs to maintain. It doesn't. They need low taxes, cheap land, cheap water, and cheap power.

tptacek 2mo ago
You made a categorical claim. We can't both be right; one of us has to be wrong. So what's false in the report I just linked to?
ToValueFunfetti 2mo ago
I'd think that the claim >Nobody invests a billion dollars in a facility without first lobbying to get an exemption from property taxes. Most states in the US have passed incentives that include sales and property tax exemptions. is not at all supported as "exactly the truth" by a link that lists 11 states with property tax abatements, most of which are not full exemptions. Am I mistaken?
- da_chicken 2mo ago
  11 states have them specifically for data centers. Most states have some form of this in general: https://www.michiganbusiness.org/services/pa-198/ https://www.michiganbusiness.org/services/pa-198/ What's more, having a statutory abatement is only one way to get around property taxes. What you also see are things like a industrial revenue bonds. Those don't require a special law. They just shift the tax burden to the public. Again, the idea here is that you're incentivizing investment and that will be offset by (a) jobs created by the facility, since labor doesn't get any tax abatement or deferment, (b) they will be bringing goods and service production to the area, and (c) eventually they will pay property taxes. For something like a traditional auto factory, that's a great incentive. The issue is that data centers have almost no local labor required. A single McDonald's is likely to employ more individuals than a data center will. And the service they provide is essentially independent of the location. It doesn't matter if it's nearby. That provides almost no advantage. And with such a small labor pool and such a large potential tax burden, there may be no economic incentive to remain in the location instead of building a new data center by the time you reach the end of the abatement.
  - ToValueFunfetti 2mo ago
    This notion that legislatures are blind to the number of jobs that will be created is contradicted by your previous link. You can scroll through table 2 for this- Alabama expects 20 jobs, Georgia 5-25, Nevada 10, etc. These states don't seem at all confused about how much local labor is required. And this is what they're setting as minimums; they believe that, absent mandate, the data centers would provide fewer jobs than these numbers. Any source that they're confused about (b)? I believed you about (a) until I read your source- the notion that they're getting misled by construction job numbers was plausible- but I can't imagine how a government would be so fundamentally confused about what data centers are as to believe they'll provide local services or somehow goods. What seems more likely to me is that the states/counties/cities believe that they will take in enough tax revenue while providing very little back in government resources that throwing in a discount works out just fine economically. I don't think you've made much of a case otherwise.
10u152 2mo ago
I work in construction, - data centres included - in Australia. From my experience you’re mostly right, however it’s more like, in order of priority: power availability, water availability, data availability, land price. Cost to upgrade upstream power transmission dwarfs all other costs. I’d note that after construction ongoing jobs are minimal. Specific example: $2B aud datacentre will support 30-60 jobs after completion. And probably 50% of those are low skill/income security,cleaning maintenance etc.
- cucumber3732842 2mo ago
  > Specific example: $2B aud datacentre will support 30-60 jobs after completion. But that's not out of the norm for industrial activity. Like how many people do you think are actually working in an LTL hub or a paper mill or a food product factory at a given time? Probably about the same. You can see the parking lots and count cars on Google Earth. The towns are estatic because compared to something that generates physical emissions or truck traffic data centers are pretty clean and low risk as long as the noise can be controlled.
WarmWash 2mo ago
A state and a municipality are different things.

tptacek 2mo ago

You made a categorical claim. We can't both be right; one of us has to be wrong. So what's false in the report I just linked to?

ToValueFunfetti 2mo ago

I'd think that the claim >Nobody invests a billion dollars in a facility without first lobbying to get an exemption from property taxes. Most states in the US have passed incentives that include sales and property tax exemptions. is not at all supported as "exactly the truth" by a link that lists 11 states with property tax abatements, most of which are not full exemptions. Am I mistaken?

da_chicken 2mo ago
11 states have them specifically for data centers. Most states have some form of this in general: https://www.michiganbusiness.org/services/pa-198/ https://www.michiganbusiness.org/services/pa-198/ What's more, having a statutory abatement is only one way to get around property taxes. What you also see are things like a industrial revenue bonds. Those don't require a special law. They just shift the tax burden to the public. Again, the idea here is that you're incentivizing investment and that will be offset by (a) jobs created by the facility, since labor doesn't get any tax abatement or deferment, (b) they will be bringing goods and service production to the area, and (c) eventually they will pay property taxes. For something like a traditional auto factory, that's a great incentive. The issue is that data centers have almost no local labor required. A single McDonald's is likely to employ more individuals than a data center will. And the service they provide is essentially independent of the location. It doesn't matter if it's nearby. That provides almost no advantage. And with such a small labor pool and such a large potential tax burden, there may be no economic incentive to remain in the location instead of building a new data center by the time you reach the end of the abatement.
- ToValueFunfetti 2mo ago
  This notion that legislatures are blind to the number of jobs that will be created is contradicted by your previous link. You can scroll through table 2 for this- Alabama expects 20 jobs, Georgia 5-25, Nevada 10, etc. These states don't seem at all confused about how much local labor is required. And this is what they're setting as minimums; they believe that, absent mandate, the data centers would provide fewer jobs than these numbers. Any source that they're confused about (b)? I believed you about (a) until I read your source- the notion that they're getting misled by construction job numbers was plausible- but I can't imagine how a government would be so fundamentally confused about what data centers are as to believe they'll provide local services or somehow goods. What seems more likely to me is that the states/counties/cities believe that they will take in enough tax revenue while providing very little back in government resources that throwing in a discount works out just fine economically. I don't think you've made much of a case otherwise.

10u152 2mo ago

I work in construction, - data centres included - in Australia. From my experience you’re mostly right, however it’s more like, in order of priority: power availability, water availability, data availability, land price. Cost to upgrade upstream power transmission dwarfs all other costs. I’d note that after construction ongoing jobs are minimal. Specific example: $2B aud datacentre will support 30-60 jobs after completion. And probably 50% of those are low skill/income security,cleaning maintenance etc.

cucumber3732842 2mo ago
> Specific example: $2B aud datacentre will support 30-60 jobs after completion. But that's not out of the norm for industrial activity. Like how many people do you think are actually working in an LTL hub or a paper mill or a food product factory at a given time? Probably about the same. You can see the parking lots and count cars on Google Earth. The towns are estatic because compared to something that generates physical emissions or truck traffic data centers are pretty clean and low risk as long as the noise can be controlled.

WarmWash 2mo ago

A state and a municipality are different things.