Public opposition to data centers is real and growing across the political spectrum. 

Residents largely see data centers as bad neighbors — emitting air and noise pollution, gobbling up huge tracts of land and water and raising utility costs, all while creating few if any permanent jobs for locals. The artificial intelligence they power is then used to raise the prices on goods we buy, surveil us, deny medical procedures, and — as industry insiders are warning — could even end humanity. Despite that, data center developers are set to receive massive tax breaks and special carveouts that will equal lost revenue for local schools and public services, which cannot be ignored in the public debate around data centers’ costs and benefits.

 While state officials tout billions of dollars in proposed data center development as a benefit to West Virginia, in reality those figures represent corporate investment for private profit. These dollars are not going to public budgets or even to West Virginians, but to private companies for out-of-state profits. The way our communities would benefit from data center development is via the tax revenue they generate, but in West Virginia, we provide stacking tax breaks, allowing multi-billion-dollar companies to dramatically reduce or even zero out their tax liability. They are exempt from paying sales tax on the expensive equipment that fills their data centers including computers, servers, software and other purchases; pay a heavily discounted rate on their property taxes; and can dramatically lower their income tax liability if they create just 10 jobs.

An analysis from the West Virginia Center on Budget and Policy found that the sales tax exemption alone could exceed $1 billion for every $20 billion in data center buildout. Gov. Patrick Morrisey has announced $96 billion in possible investment, and while all of that is unlikely to come to fruition given our history of economic development promises that later fizzle out or underwhelm, this demonstrates the potential billions of dollars in tax revenue our state could be leaving on the table. 

While any merits of data centers are dubious, if they are going to exist in West Virginia, they should have buy-in from the communities in which they locate and pay their fair share in taxes just like any other business or household. As we look around the state, there is no shortage of needs that are currently on hold due to a lack of public funding: building out flood-resilient infrastructure, roads and bridges; ensuring the southern coalfields have broadband internet and clean drinking water; fixing the public school funding formula to better accommodate rural communities and students with disabilities; investing in job training and higher education; and addressing the state’s worst-in-the-nation child welfare crisis. 

At the very least, we shouldn’t be begging data centers to locate in West Virginia with a race-to-the-bottom strategy to have the least regulation and lowest taxes in the nation. Take it from data center corporations in their own words — they need us. Nscale officials say they chose West Virginia for our energy. TransGas, developers of the Adams Fork Energy site in Mingo County, say they chose West Virginia for a “proprietary fresh-water reserve” and the site’s location near “low-cost natural gas reserves.”

Notably, none cite our state’s tax breaks. Rather, they make clear they are here for our abundant but finite natural resources. When understood that way, one might recognize parallels with our state’s experience of timber, coal, and natural gas extraction. If we do not ensure our people are prioritized rather than sacrificed amid potential data center developments, we will be stuck with a similar result where our resource wealth is extracted and shipped out of West Virginia, making out-of-state corporations even wealthier while leaving our local communities no better off in the long-term. 

The debate over data centers should continue in the public arena, with our people having the final say over whether they want them in their communities. But policymakers should not wait to take action. They should eliminate all tax breaks for data centers to ensure West Virginians see a real and lasting benefit from the data centers that may locate here, restore local community control by repealing HB 2014, and codify requirements that data centers report on their environmental impact, local hiring, and water and electricity use.

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