Governors Turn Against Giant Data Centers Amid Election Heat

As midterm elections draw near, governors in several swing states are rethinking how they treat massive data centers that power AI tools and cloud services. The shift comes as voters grow uneasy about the energy and water demands of these sprawling facilities.

In Pennsylvania, Gov. Josh Shapiro announced that his administration will no longer fast‑track permits or grant tax breaks to data‑center projects unless the companies agree to cover the full cost of electricity, limit water consumption, and run a local outreach program. He called the surge of speculative proposals "unacceptable" and faces pressure from GOP challenger Stacy Garrity and communities angry about new sites.

Texas sees a similar swing. Democratic hopeful Gina Hinojosa aired a TV ad accusing Gov. Greg Abbott of selling out to data‑center executives. Abbott, once a vocal supporter, has now ordered regulators to protect electricity rates, pause new projects, and is drafting legislation to strip a billion‑dollar‑plus tax incentive.

Other states are joining the trend. Arizona Gov. Katie Hobbs placed a three‑year moratorium on sales‑tax exemptions for data centers, calling the credits a corporate handout. New York Gov. Kathy Hochul imposed a one‑year ban on large facilities to study environmental impacts, while Illinois Gov. JB Pritzker halted new exemptions until stricter standards are set. Across the country, residents are filling town meetings, fearing loss of farmland, water shortages, noise, and higher utility bills.