Beyond the Ballot
The midterm elections ushered in a series of headlines to the tune of “data centers had a very, very bad night.” On a night characterized by winners and losers, one of the core components of modern digital infrastructure was assigned the latter.
Several measures related to data centers were on the ballot, recommending varying degrees of regulation. Some focused on zoning and the review and approval process, whereas others were more sweeping and included bans and moratoriums. Of these measures, all but one restriction was approved. Beyond the immediate restrictions passed, several candidates were elected who took anti-data center stances on the campaign trail. States like Texas, Ohio, and Wisconsin have good reason to expect an uptick in restrictions.
Viewed in isolation, these results paint a daunting picture for the future of data centers and innovation in America. However, there were 40 other states with no data center measures on the ballot at all. While legislatures and elected officials can still move data center policy, it’s worth noting that locations still remain where construction and operation were not immediately impacted by the November election cycle. And it’s worth suggesting that these locations will become even more valuable to the developers looking for a landing spot for data center investment, presenting an even greater economic opportunity than prior to the election.
Louisiana did not have any data center measures on its ballots. An early success story in the data center boom, the state’s leadership has remained firmly in support of data centers. The jobs, tax revenue, and community investment that have followed make the case. In Richland Parish, Meta’s Hyperion campus has transformed the parish’s economy. The project’s first sales tax payment came to $22.4 million and some veteran teachers in the parish received nearly $51,000 bonuses. The campus is also supporting jobs and attracting new, unrelated business to the area as entrepreneurs draw to the increased traffic and business opportunities presented by the historic investment. Similarly, Amazon’s projects in Caddo and Bossier parish are changing the regions, bringing over 700 direct jobs and an estimated 1,784 indirect jobs across the region. Louisiana’s open door has welcomed more than data centers, it has welcomed galvanized infrastructure, higher salaries, increased opportunities, and economic growth.
For the states and localities like Louisiana where data center construction is still an option, the midterms hold just as many lessons as opportunities. Exit polling indicates that voters care deeply about the ways that data centers will impact their communities. For those voting for Congress, 23% identified data centers as a “crucial factor” and another 33% as a “major factor” in their decision. Another survey question asked “would you favor or oppose the construction of a new data center in your community?” with 76% choosing opposition.
Community and state leaders eager to work for those who elected them, while also attracting data center opportunities, have a real responsibility to take these concerns seriously, or risk a ballot-lead rejection of those opportunities.
The question for states still positioned to attract this investment is how to capture its economic and technological benefits, while addressing the concerns that drove voters elsewhere to put up new barriers. The work begins with answering questions about what the construction and the operation process will look like:
- How much power will it use? And who pays?
- How much water, and from what source?
- What do local zoning rules allow?
- Who will use its services?
- How many jobs, and for how long?
Earning community trust will go beyond answering these questions. In a thoughtful opinion editorial for the Washington Examiner, former U.S. Senator Krysten Sinema and former Congressman Garret Graves posited that the choice is not between “AI leadership and protecting the communities that host data centers,” because both are possible. Sinema and Graves argue that protecting ratepayers and prioritizing future-proof practices, like responsible water use, and long term jobs should be non-negotiable. Data centers should benefit, not detract, from their respective communities, and through strategic investment, local hiring, and conscious practices around water and energy, this is achievable.
Data centers were not on every ballot last week, but every state and local leader has a duty to decide how they will encourage innovation while also protecting their constituents. The options are not mutually exclusive, and the towns and cities still open to data center development deserve a process that is transparent, responsive to local concerns, and serious about leveraging investment for long term benefit.
