Local opposition has delayed or disrupted projects collectively worth hundreds of billions
State and local races are crucial to data-center development because state and local leaders often approve projects, while congressional contests are followed mainly to gauge overall sentiment and the possibility of national restrictions. The races include more than 40 local ballot measures, three dozen governor elections and many mayoral and other county contests that could increase restrictions. Across Texas, Ohio, Michigan and Georgia, candidates are proposing pauses, bans and stronger approval conditions around electricity, water, tax exemptions, community disruptions and community benefits.
Republican Michigan Rep. John James has proposed pausing approvals to give localities more control. In Georgia, Democrat Keisha Lance Bottoms wants to pause the data-center boom and review how projects use local electricity and water and receive tax exemptions.
Many in the sector are nervously watching the Texas governor’s race, where Democratic candidate Gina Hinojosa has pledged to ban new approvals until the legislature passes a bill protecting communities. She argues that incumbent Republican Gov. Greg Abbott’s recent pause of new approvals does not go far enough to address fears about the power and water consumption from roughly 200 planned facilities. Recent polls show Hinojosa and Abbott locked in a tight race. Texas has the second-most data centers and is viewed as a business-friendly conservative stronghold favorable to developers. Matthew Aks, senior strategist at investment bank Evercore ISI, said an Hinojosa victory “would be an economically significant development in its own right and the signaling would be above and beyond that.”
Ohio has welcomed data centers in recent years, used tax exemptions to attract technology investment and is rethinking its role in the AI race. More than 20 local ballot initiatives across the state concern data-center restrictions, adding to a governor’s race in which both candidates have pledged to make approvals more onerous. Democrat Amy Acton has called for a ban on new projects unless they meet certain criteria including covering all costs and negotiating publicly with communities hosting the projects.
Republican Vivek Ramaswamy, who previously supported data centers, said in August that he would also halt approvals until a bill ensures facilities provide free power for local residents and pay full property taxes. His plan followed months of opposition to data centers in Ohio.
In Michigan, Democrat Jocelyn Benson wants stronger guardrails. Recent polls show Benson leading in the race to succeed Democratic Gov. Gretchen Whitmer, who has been criticized by locals for welcoming data-center developers.
In the Ohio Senate race, Democratic Senate candidate Sherrod Brown has attacked incumbent Republican Sen. Jon Husted as “the face of data centers” for his past support of the facilities and criticized tax exemptions for tech companies and projects that pass costs to local residents. Brown wants an end to tax exemptions, greater transparency and more local control over approvals. Husted, the state’s past lieutenant governor when data centers flocked there, has said he always agreed tech companies need to pay their own way. A bill Husted proposed in Congress asking developers to promise to minimize community disruptions was recently rejected by Democrats for being too weak.
Progressive Senate candidate Abdul El-Sayed has backed a proposal from Sen. Bernie Sanders (I., Vt.) and Rep. Alexandria Ocasio-Cortez (D., N.Y.) for a federal ban on new data centers. He also called for strict regulations on AI models to prevent hacks and other risky behavior. El-Sayed is in a tight race against former Republican Rep. Mike Rogers and has put out what he calls “terms of engagement” for data centers, including clear community benefits.
Developers have flocked to Georgia in recent years because of favorable tax exemptions and abundant power. Republican Gov. Brian Kemp, whom Bottoms is seeking to succeed, has welcomed the facilities. In the close race, Bottoms’s opponent, GOP billionaire businessman Rick Jackson, has defended his decision to invest in a data center in Texas and touted the benefits of the projects. Local officials should dictate whether projects go forward after the state sets clear guardrails, Jackson has said.
Data centers also factor into the close Texas Senate race between Democratic state Rep. James Talarico and Republican Ken Paxton, the state’s attorney general. Talarico has accused Paxton of “selling off Texas” to the data-center industry, alleging that Paxton accepted campaign contributions from the sector as state leaders approved tax exemptions for developers. Paxton has said he supports Abbott’s restrictions and wants to make sure state residents are not paying for the facilities.
In Nashville, Tenn., Ernest Popescu had agreed this summer to build a data center before local leaders passed a moratorium effectively banning new projects through December. The prospect of a lengthy delay prompted Metrobloks chief executive Popescu to withdraw from the project and focus on other developments. Popescu, a former Amazon.com and Meta Platforms executive, has noticed investors who finance data centers worrying more about moratoria appearing across the country and potentially spreading after the coming elections. “It’s made the investment community very skittish,” he said. “The backlash is far-reaching.”
Local opposition has already delayed or disrupted dozens of projects worth hundreds of billions of dollars this year. Oregon recently became the latest state to ban new project approvals, prompting one city to declare a state of emergency because of the threat to the local economy. President Trump recently called for the industry to ensure the facilities benefit communities financially and do not affect power prices.