Data Centers Economic Benefits Are Overstated, Advocates Say

April 16, 2026 – Data center developers are overselling their economic benefits to local communities, according to advocates.

Citing Prince George's County's $6 million annual revenue, Brandon Forester , senior campaign lead at MediaJustice, argued developers tend to “overstate benefits,” with the tax revenue generated often reduced by incentives.

“They typically give tax breaks on the most profitable parts of the data center, especially the expensive GPUs,” Forester said.

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His remarks came Wednesday at a webinar hosted by the National Digital Inclusion Alliance and the Institute for Local Self-Reliance.

Those dynamics can leave local communities with fewer benefits than expected, said Dirk Elmendorf , co-founder of cloud computing company Rackspace Technology.

“The main company isn’t really located there, so the taxes go somewhere else,” Elmendorf said. “Happy tax day.”

Some localities are pushing back against such deals.

Residents in Port Washington, Wisconsin approved a referendum April 8 restricting city officials’ ability to grant tax incentives for major developments without voter approval. The vote followed a proposed $15 billion AI data center project tied to OpenAI and Oracle.

Communities should take a more active role in negotiating data center development, said Jordana Barton-Garcia , director of the Rio Grande Valley Broadband Coalition, pointing to examples from Tucson, Minneapolis, and Wichita.

She described the process as a negotiation in which communities can “create and claim value” by aligning local priorities with data centers' needs.

Brandon Forester, Dirk Elmendorf, and Jordana Barton-Garcia spoke April 15, 2026 at a webinar hosted NDIA and ILSR.

Barton-Garcia pointed to Texas Senate Bill 6 as an example of how policy is evolving to require developers to contribute more directly to infrastructure costs.

Enacted in June, the bill requires “large load customers” to cover the cost of transmission lines and other grid upgrades they require.

For many communities, the costs of data center expansion are already clear.

“Ultimately, it's what's happening to the communities,” Forester said. “It's the pollution in Memphis. It's your rising energy costs.”

Opposition to large-scale data centers has reignited a push for independent energy and broadband sources, Forester said.

“This is getting people interested in throwing out their private utilities,” he said. “Whether that's broadband, electric or water, people want to get rid of them.”