Texas Data Center Exemption: $3B Loss, Looming Crisis

0:00It's April 8th. This is El Paso News today, AI-powered stories from your city. I'm Cory with the story. Texas is set to lose at least $3.1 billion in sales tax revenue over the next two years from an exemption for its booming data. Center industry, that's according to the State Comptroller, and it's probably a low-ball figure with all the new builds popping up. This makes it one of the priciest incentives Texas has ever handed out, soon topping the nation. Back over a decade ago, lawmakers okayed this break when data centers were small potatoes, costing just 5 to 30 million bucks a year and lost. Revenue, fast-forward and a jump to over 150 million in 2023, hitting at least 1.3 billion this year. By fiscal year 2030, projections show nearly 1.8 billion annually with over 300 centers running and 100, 42 more under construction. Lawmakers are sounding alarms, calling it unsustainable as State Senator Joan Huffman plans the push-bills to repeal or tighten it up.

1:03Locals in spots like San Marcos and Waco are pushing back hard against new projects and a recent poll shows 65% of Americans don't. Want one nearby? That lost cash could fund the whole school voucher program or double the disaster relief pot. Industry folks argue the exemption keeps Texas as the top spot for data centers, bringing jobs, billions in local investments, and other taxes like property and sales. Critics counter that cheap land and power draw them more than tax breaks and places like Virginia and Illinois are already pausing or rethinking. There's amidst skyrocketing costs. With hearings kicking off in July through the Senate Finance Committee and the full session in January, Texas faces a tight-road walk, are being keeping the tech. Boom alive without bleeding the budget dry.