(The Center Square) – Microsoft backed out of a 240-acre data center plan in Caledonia.
Hundreds showed up to object to a large-scale data center planned for Port Washington.
Another proposed data center was recently rejected by Menomonie Mayor Randy Knaack.
Opposition is growing across Wisconsin to the large-scale projects as residents learn about the taxpayer costs, impact on electrical rates, water use and lack of benefits of the projects.
The Center Square has exclusively reported on taxpayer incentives given to the projects, including $70 million in sales tax that has been waived on project construction in the first two years of a state exemption, far exceeding Department or Revenue estimates of the exemptions.
Wisconsin comedian Charlie Berens has become actively outspoken on the issue, pointing out when meetings occur like Tuesday’s Common Council in Port Washington, a project expected to use the same amount of electricity as the city of Los Angeles as it will be the largest energy user in Wisconsin history with Vantage asking for 1.3 gigawatts of energy to be available by 2027 and ultimately 3.5 gigawatts of power.
“AI data centers are sending local power bills higher than Uncle Joe when he goes to Illinois for ‘groceries,’” Berens said in a recent post, citing a Bloomberg report on electric bill increases in areas near data centers.
The Center Square has been reporting on those projected electric bill increases – between 25% to 70% in the next 10 years without intervention from policymakers – over the past year, along with the tax breaks given on both sales and property taxes that often negate the proposed positive impacts of the projects.
Other states, such as Minnesota, have lowered sales tax exemptions for data centers after the actual exemptions have far exceeded projections.
Wisconsin lawmakers, however, have been working on expanding the sales tax exemptions that apply to much of the project building materials and computing materials along with equipment replacement at certified data centers.
Voters across the U.S. have said they don’t want data centers built in their community and even more oppose the data centers if tax incentives are awarded to have them built, according to a poll by Libertas Network conducted based on questions from The Center Square.
Microsoft is still working to build a pair of data center projects worth a combined $7 billion in a tax increment district at the former Foxconn site in Racine County. State lawmakers have passed TID exemptions to allow the projects to go beyond the 12% of overall property value allowed for TIDs in a municipality.
“The cost estimates in the tax expenditure report might be way higher than what they predicted in the budget in 2023. It’s safe to assume that most of that lost revenue went to Microsoft,” Good Jobs First Senior Research Analyst Kasia Tarczynska told The Center Square
Berens went on to point out that the AI data centers will employ more robots than people once built, pointing out that promises related to employment should be written into a contract, not be just words.
Berens encouraged the public to reach out to state lawmakers to make rules on what data centers can do.
“Right now data centers are like roundabouts, there are no rules,” Berens said.
Sen. Julian Bradley, R-New Berlin, and Assembly Speaker Robin Vos did not immediately respond to questions from The Center Square regarding the benefits of the sales tax exemption and other tax breaks for data centers.
Lawmakers spoke about the benefits in a committee meeting last week pushing the expanded sales tax exemptions without talking about specifics. Many have pointed to construction jobs that will be necessary as the data centers are built but employment after the data centers open will be lower.
The projects also have heavy requirements of water for cooling and electricity. The first Mount Pleasant data center and Port Washington combined will require far more electricity than every Wisconsin household combined, according to Clean Wisconsin.
