The Hill: Anti-data center measures gain traction at state, local level

Measures seeking to block or rein in data center construction are gaining momentum at the state and local level, as Americans increasingly sour on the massive buildout of AI infrastructure in their communities.

The Maine Legislature became the first in the nation to pass a bill banning the development of large-scale data centers last week, while a Wisconsin city approved a referendum earlier this month to give voters greater say over major tax-funded projects in response to the construction of a nearby data center campus.

The backlash against data centers has been rising over the past year, as local communities worry about the impacts of the sprawling energy-hungry infrastructure on their electricity bills and environment.

“This isn’t just a flash in the pan,” Ruth Whittaker, director of technology policy at the center-left think tank Third Way, told The Hill. “This is an issue that policymakers need to be paying attention to and taking seriously.”

The data center buildout, which was spurred by the race to develop AI and the need for vast computing power, initially enjoyed widespread bipartisan support.

Governors from both sides of the aisle touted major data center projects arriving in their states, while the Biden and Trump administrations alike sought to implement policies that would speed up the permitting and construction process.

However, the tide quickly turned against data centers. In 2025, $156 billion worth of data center projects were blocked or delayed by local opposition, moratoriums and litigation, according to Data Center Watch, a project from the AI company 10a Labs tracking pushback to the buildout.

“The people who were rolling out the red carpet were the governors and state legislators, who are typically always in a position of genuflecting to any new industry that is promising for better or worse to create jobs,” said John Quigley, a senior fellow at the University of Pennsylvania’s Kleinman Center for Energy Policy.

“That’s where the welcome mat got rolled out,” he continued. “When the proposals finally hit the host communities, the opposition was immediate.”

At least 11 states have put forward legislation to limit or ban data center construction, according to Axios. Maine appears close to enacting an 18-month ban on new data centers that use over 20 megawatts of power, although the legislation is still awaiting the signature of Gov. Janet Mills (D).

It’s unclear whether Mills, who sought an exception for a data center project on a defunct paper mill site that was rejected by state legislators, will approve the measure. She told NBC News on Friday that she was going to “read it very carefully” while underscoring the omission of her requested carveout.

Meanwhile, the city of Port Washington, Wis., which sits just north of Milwaukee, approved a referendum in early April requiring voters to sign off on tax breaks for projects worth more than $10 million.

The local referendum was prompted by pushback to construction of a data center campus in the city. The project is set to receive about $450 million in tax benefits.

Tax breaks for data centers have also been a key point of contention in Virginia, where state legislators have debated eliminating a sales tax exemption for the AI infrastructure.

A recent poll of Virginia voters found that public opinion of data centers has shifted dramatically in the Old Dominion in recent years. Notably, northern Virginia is home to “data center alley,” an area nicknamed for the high prevalence of data centers.

Just 35 percent of voters in the state said they would be comfortable if a new data center were built in their community, according to a Washington Post-Schar School poll of Virginia released last week. This is down from 69 percent in 2023.

While 61 percent supported state tax breaks for companies building data centers three years ago, 37 percent said the same now, the poll found. About two-thirds of current voters also said they think the state should end the sales tax incentive for data centers.

Just 35 percent of voters in the state said they would be comfortable if a new data center were built in their community, according to a Washington Post-Schar School poll of Virginia released last week. This is down from 69 percent in 2023.

While 61 percent supported state tax breaks for companies building data centers three years ago, 37 percent said the same now, the poll found. About two-thirds of current voters also said they think the state should end the sales tax incentive for data centers.

Many data center projects have previously been shrouded in secrecy due to use of nondisclosure agreements (NDAs). Microsoft announced earlier this year that it would no longer use NDAs with local governments as the practice came under scrutiny.

Robert Montejo, a partner at the law firm Duane Morris who represents data center developers, noted that community engagement has become increasingly important.

“Going into all these projects as developers, with your eyes open, and doing the appropriate amount of due diligence and the appropriate amount of community outreach has become significantly more important over time,” Montejo told The Hill.

“Being more intentional in the approach, I think, is probably the biggest thing that data center developers can do, and then to lay that approach out at the community level,” he added.

However, some remain skeptical of recent efforts by data centers. Quigley suggested that “the charm offensive has basically been words on paper and not nearly broad enough to address all the impacts that the industry is having.”

For Fengqi You, a professor of energy systems engineering at Cornell University, the answer to data center pushback lies somewhere in the middle.

“The key point is that in the end we always want to achieve a balance,” he told The Hill. “We want to make sure that we minimize, avoid of all these unintended negative consequences to the community, to the state.”

“But also, to be fair, this sector is growing quickly and contributing quite a bit to the economic growth as well in many regions,” he added. “So how to achieve a balance, that’s the harder part.”