(The Center Square) – A bill that would create a tax benefit extension for a potential data center project in Port Washington will now also include Beaver Dam.
Assembly Bill 175 allows for an exception to the 12% rule related to tax increment financing districts, which allow business owners within the district to keep the additional property taxes they would have paid for building out a project and use those funds toward building improvements.
The rule says that not more than 12% of the property value in a district can be part of a TIF. A new potential $80 million Cloverleaf data center is being discussed for the area.
Currently, just less than 8% of the property value in Port Washington is in a TIF, allowing for more than $137.7 million of value under current state law.
Meta is discussing a nearly $1 billion data center in Beaver Dam, Bloomberg reported.
Incentives for data centers are often opposed because, despite the large amount of money spent on the buildings, they do not require much staff and they take a large amount of energy.
A group of Republican lawmakers in the state are pushing a $2.25 million nuclear study to increase the state’s energy capacity.
During discussions of the nuclear siting, Rep. David Steffen, R-Howard, said that a new Microsoft data center in Mount Pleasant would use the same amount of energy as the city of Madison and the Cloverleaf project in Port Washington would use the same amount of power as the entire city of Los Angeles.
Pat Garofalo, the director of state and local policy at the American Economic Liberties Project, recently compared states losing money on TV and film tax credits to those now offering tax incentives for data centers.
He wrote that “some of the earliest adopters, most prominently Virginia (which has been subsidizing data centers since 2008), looking at costs that are set to spiral out of control and negative knock-on effects in the local communities that host data centers multiplying.”
A least 10 states are currently losing $100 million or more in taxes from data centers, according to an April report from Good Jobs First.
“As the end users of building materials, machinery, and equipment, data center companies would normally pay sales and use taxes,” the report states. “States, however, exempt those purchases, making these exemptions the costliest state subsidies for data centers. Because server farms are extremely capital intensive and require replacement of servers every two to five years when they wear out, these exemptions are lucrative for companies and costly for states and localities.”
