MADISON, Wis. — Some state lawmakers want to let local governments in Wisconsin spend more taxpayer money on infrastructure investments to attract data centers to their communities.
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Several proposed data centers in the state could bring in billions from big tech companies looking to expand their cloud computing and artificial intelligence capabilities. But projects like those in Port Washington and Mt. Pleasant could also use as much energy as an entire city, according to developer estimates.
“These data centers are so big and so valuable and such a prize for a community,” Republican Sen. John Jagler said.
Watch: Bill would let local governments spend more to attract data centers
One of the strongest tools local governments have to attract development is tax incremental financing, which allows a municipality to spend taxpayer funds up front to prepare a site for development. In the case of data centers, that could include building out the energy grid and water lines.
The municipality hopes that once a business builds on the site, the property tax value will increase. Local government can then use all of the increase in property tax revenue to pay back its initial investment.
There’s just one problem: Current state law limits the amount of property a city can tie up in these developments to 12% of the municipality’s total taxable property. In cities like Beaver Dam and Port Washington, completed data centers could be worth closer to half of the city’s existing property tax value.
Jagler and Republican Rep. Mark Born authored a bill that would get rid of that 12% cap for data center projects. Both lawmakers represent the City of Beaver Dam, where developers are looking to build a new data center on a 500-acre parcel.
“It’s gonna provide jobs. It’s gonna just enhance the community,” Jagler said after a committee hearing on the bill on Wednesday. “These projects are going to happen. This is just to make sure those communities continue to grow.”
The bill has drawn opposition from environmental advocates, however, who worry that it doesn’t address potential risks of data centers, such as pollution and increased electrical rates for nearby residents.
“We want to make sure that any new data centers that are coming to Wisconsin are making sure that they are being powered with clean, renewable energy,” Jennifer Giegerich of Wisconsin Conservation Voters said.
This bill is one of several measures aimed at bringing more data centers to Wisconsin. In the last legislative session, the Legislature eliminated sales taxes for equipment used to build and operate data centers.
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