The data center pitch vs. the numbers

TL;DR: The data center backlash is getting personal—and no one is feeling the effects quite like John Perkins. The city council member was recalled by voters in small-town Missouri on Tuesday after he backed a more than $6 billion tax break for a data center project. Perkins was years away from reelection—making him one of the first people to be pushed out of office over a data center deal. The vote landed a day after President Donald Trump promised data centers would make towns rich and add lots of jobs—but the actual numbers don’t really back this up.

What happened: Trump has something to say about anti-data center voters: They’ll “end up being backwards and poor,” he posted on Truth Social on Monday. “If they want to be successful and rich, with far lower taxes and jobs all over the place, let Data Reign.”

So, do data centers actually deliver lower taxes and more jobs for these communities? The record so far says mostly no.

Far lower taxes: While a few regions have enjoyed lower property tax rates because of data centers, the tax breaks given to data centers largely negate any benefits.

Forty states have some sort of subsidy or tax break (such as exemptions on sales and utility taxes) for data center projects—and the terms are usually locked in for 10 to 30 years. That’s decades in which a data center contributes far less to the local community while everyone else’s tax bill stays where it was (and in some cases, their electricity bills go up).

For example: In Virginia, for every dollar of sales tax the state let data centers forgo between 2014 and 2023, it got back an average of 48 cents. This was in personal income, corporate, and nonexempt sales taxes, which is all credited to the exemption, according to a 2024 study by the Virginia Joint Legislative Audit and Review Commission. That means it’s losing 52 cents for every dollar—and the state reported a loss of $1.6 billion last year, just in exemptions for data centers.

Jobs all over the place: To their credit, most tax break incentives for data centers require the projects to hire people (those for many other industries don’t). But the actual number of jobs required to qualify is…shockingly low.

The requirements range from just five to 100 (typically permanent) jobs per project. Building a data center can take thousands of workers (over about three years), but running one usually takes just a few dozen—meaning long-term jobs largely never show up. In one instance, a Microsoft data center in Illinois got a tax break of more than $38 million but created just 20 permanent jobs, per CNBC. In New York, a JPMorgan Chase data center promised one permanent job to get nearly $77 million in tax breaks.

Bottom line: It’s a hard sell to ask people with rising power bills to subsidize the richest companies and get little in return. Perkins is an example of what that resentment looks like when communities reach a breaking point and the numbers don’t quite add up. —LC