As the data center industry has expanded in Georgia, there has been a shift from officials welcoming new data centers with open arms to being more careful about their proliferation in the state.
Finding the right balance is an ongoing challenge for state and local lawmakers and policy leaders.
Part of that journey started March 7, 2018, when then-Gov. Nathan Deal made a big economic development announcement: “And I am happy to today announce that Facebook is constructing its 9th U.S. data center in Stanton Springs,” he said to a crowd of officials and reporters at the Georgia State Capitol.
Georgia Department of Economic Development Commissioner Pat Wilson was there.
“The landscape has changed tremendously from when we were – and are – very happy about Facebook’s investment in Georgia,” he said.
But he added, there’s a difference between now and then.
“Data centers have continued to evolve. The need for data centers continues to grow,” Wilson said. “Major job creation projects come in with more automation and more data requirements than have ever been needed.”
With the rise of artificial intelligence, data centers have gotten bigger. And even big economic development projects that aren’t themselves data centers use tons of data. The new Hyundai plant near Savannah, for instance, uses an enormous amount of automation.
“It’s the infrastructure of the future, period,” said Georgia Chamber of Commerce President and CEO Chris Clark. “The last century was built on oil. The next century is built on data.”
Clark said he also sees the industry as an opportunity for rural Georgia as data center companies build out fiber lines and pay into local tax bases. He also sees artificial intelligence and data centers as growth opportunities, even as Georgia and the United States face a demographic cliff with falling birth rates and an aging population.
But with the growth of the industry have come increasing questions about land use, water use and energy use.
There are also questions surrounding incentives; for instance, state sales tax exemptions for data center equipment and infrastructure, which are projected to take $176 million out of the fiscal year 2026 state budget — 10% more than from the fiscal year 2025 state budget.
Republican State Sen. Chuck Hufstetler from Rome has been raising concerns about the impact on the state budget and the budgets of Georgians.
“I do very much support the data centers coming in,” he said. “There’s some people that want to give away the farm and others that don’t want any growth, and I just want us to be smart about it.”
Hufstetler, an important voice at the State Capitol as the chair of the State Senate Finance Committee that oversees tax breaks, is also concerned about local government budgets. State sales tax exemptions are projected to cost local governments $136 million in state fiscal year 2025 and $150 million in 2026.
Hufstetler also worries about electric utility customers paying more for electricity due to data center demand.
Bottom line, Hufstetler believes it is time for the tax breaks to go away. In 2024, his bill to sunset the state tax incentives passed both houses of the legislature but was vetoed by Gov. Brian Kemp.
“He thought it was pulling the rug out from under him too quick, but the fact is they’re coming anyway,” Hufstetler said. “Why throw state money and local money that you don’t have to? Why not use that money to help pay the bills for governments and to help build up the infrastructure?”
Across the State Capitol, Republican House Speaker Jon Burns has tapped Republican State Rep. Brad Thomas to lead the Special Committee on Resource Management, which includes looking at the resources data centers need and are using.
“I tell everybody it’s the most unglamorous name for a committee that really touches just about everything that is important to people,” Thomas said. “I mean our whole foundation for our society and our economy is based off of cheap available energy and water.”
Thomas says when it comes to policy ideas that come out of the committee, which has begun meeting, he’s looking to head off unintended consequences while supporting the growth of Georgia’s economy.
Georgia Chamber President and CEO Clark is also hoping for longer-term thinking.
“Entrepreneurs, small businesses in Georgia, they’re going to start up over the next 25 years and create the next great company in the world, are going to rely on data, and so I want them to understand that yes there might be growing pains right now,” he said. “but we need to think long term, the value that they’re going to provide.”
The next time lawmakers can take up any state-level proposals would be in January.
This story is part of the WABE Newsroom series Server South: What’s powering Atlanta’s data center growth — and what it means for you.
