Democratic gubernatorial candidate Aaron Ford on Wednesday pledged to pause tax breaks for data centers if elected governor this November.
Under Ford, the tax abatements, which have provided almost $457 million in tax breaks to data center projects, would be paused until an audit is conducted by the Governor’s Office of Economic Development (GOED). In his proposed plan, Ford said Republican Gov. Joe Lombardo has “failed” at holding data center developers accountable and providing transparency to the public.
Ford was one of the state lawmakers who co-sponsored legislation to grant tax abatements to data centers back in 2015—but at the time, the tech warehouses weren’t a threat to water and energy supplies, as they often are now. In return, data centers were intended to provide about 300 permanent jobs, $1 billion in tax revenue, and more than $6.6 billion in economic activity.
Lombardo’s GOED has not tracked if data centers lived up to these promises.
A PAC affiliated with Lombardo received $1 million for this campaign cycle from Jessica Roy, the wife of Rob Roy, the founder of Switch, a large data center company in Southern Nevada.
Lombardo has openly voiced his support for data center development in the Silver State despite widespread criticism. He submitted an opinion piece to the Reno Gazette Journal in June titled “Nevada is proving data centers can be done right,” in which he said Nevada wasn’t facing any issues as it relates to water or electric bills due to data centers.
“Joe Lombardo says he’s ‘wholeheartedly in support of data centers.’ I, on the other hand, will be a Governor who is wholeheartedly supportive of Nevadans – and that means making data centers pay up,” Ford said in a statement.
Key components to Ford’s plan
If elected, Ford will pause new tax abatements for data centers while his GOED conducts audits to verify if data centers are delivering on their promises.
By state law, current abated data centers have five years to be in compliance with their community benefits agreements. Ford’s campaign told The Nevadan he will honor current abatements — but as his office audits each abated data center and finds if developers are not complying with their agreements, he will cancel its tax abatement.
He also promised to force data centers to pay for the energy they use, rather than allowing the cost to shift to consumers. It’s projected that data centers could double the amount of power usage in Nevada — and this cost could shift to consumers, according to the Las Vegas Review-Journal.
Ford also vowed to make data centers update the state’s electrical grid for the projected energy increase, to prevent utility price hikes on Nevadans.
In addition to protecting consumers, he promised to demand that data centers create sustainable jobs with “top-notch” healthcare, adhere to wage standards, and encourage data center companies to negotiate labor agreements with unions.
“When I’m Governor, Joe Lombardo’s gravy train for data centers is coming to an end,” Ford said. “I’m going to implement some of the strictest rules in America: data centers will need to bring their own water or coolant, pay for their own electricity so ratepayers’ bills don’t go up, and actually deliver the sustainable high-paying jobs and tax revenue they’ve promised.”
