Data Center Tax Revenue Funds Schools, but Voters and Local Officials Are Pushing Back

The AI data center rush is forcing a question in towns across the country: what does the community get?

In Loudoun County, Virginia, the answer has been a large commercial tax base that helped pay for schools, parks and infrastructure, according to Bloomberg's Wall Street Week segment on Oct. 24. The same segment says county officials are now putting limits on further growth.

The takeaway Bloomberg draws is that towns have more bargaining power than they assume.

A school district puts a number on it

Edgewood City Schools in Trenton, Ohio, has put hard figures on the trade. The district says tax revenue from a 250-megawatt Amazon Web Services data center now under construction in Trenton's industrial park will leave it with a positive cash balance of nearly $1.78 million by 2031. Without the project, its most recent financial forecast shows a possible deficit of more than $20 million.

The developer, Prologis, gets a 15-year, 75% property tax abatement under an agreement the City of Trenton approved this summer. The district expects a one-time upfront payment of $940,000 and about $1.3 million in additional revenue each year for 15 years. After the abatement ends, it would receive roughly $3 million annually.

That means the developer pays a fraction of normal property taxes for 15 years, and the schools still come out ahead of their baseline forecast.

Molly Bryden, a climate and sustainability researcher at Policy Matters Ohio, said upfront payments and payments in lieu of taxes are common in these deals. "For a smaller community that's been dealing with decades of disinvestment, any deal that big can be sometimes hard to turn down," she said.

Trenton votes Nov. 3

Some Trenton residents want the project, or any like it, stopped. They have put Issue 17 on the Nov. 3 ballot, a charter amendment that would bar any data center larger than 25 megawatts. Supporters say it would protect residents from pollution, noise and higher utility bills linked to data center development.

The ballot measure has faced legal challenges. It is unclear whether it could halt the AWS construction already underway, and city officials have indicated they may sue if it passes.

Edgewood Schools says it takes no position on Issue 17. In a statement, the district said it released the numbers because complete financial figures only recently became available, and that residents have "many non-financial factors" to weigh.

Many announced projects may never exist

Not every announced project is real. Bernstein Research analyzed thousands of planned U.S. data centers and concluded only about 35% of announced capacity is likely to be built, according to Business Insider.

The industry's term for the dubious ones is "Bragawatts": huge projects announced by companies with little building experience, some without power, permits or customers. Then there are what Business Insider calls "ghost projects," where developers file several grid-connection requests hoping one site works out. In Texas, those requests have reached more than five times the state's existing electricity supply, per Business Insider.

The demand is still real. Business Insider's Eugene Kim reported exclusively this week that Amazon, one of the world's most experienced data center builders, is struggling to secure enough electricity for its AI equipment.

Public land and state politics

The Bureau of Land Management is considering 35 data center-related applications on public land in the western U.S., according to a tracker published by the Center for Western Priorities, which built it from BLM land records. Seventeen are for data center campuses and 13 for supporting infrastructure. Five could not be classified. One project in eastern Utah covers more than 9,000 acres and would be powered by small modular nuclear reactors.

The group, which describes itself as a non-partisan conservation organization, wants the Trump administration to seek public comment first. "Data centers are not like oil, gas, or minerals, which are extracted from public lands because that's where they exist," said deputy director Lauren Bogard. She also called for site-specific environmental review and "meaningful, negotiated community benefits" when private companies profit from public land.

The industry's case is economic. A U.S. Chamber of Commerce report released this week says a single data center development can support an average of 5,200 jobs in a state during a typical two-year construction phase. It also says such a project adds $680 million to the state economy and generates $400 million in annual state personal income. The Chamber calls data centers "economic engines powering America's future."

State politics are mixed. TRG Datacenters, a Texas-based company, gave Virginia a perfect 100 on its AI readiness index in an August study, with Ohio second at 88.2. CNBC's 2026 state rankings, published in July, warned that Virginia's grid is strained and that public backlash is growing, with some localities weighing outright bans. In Texas, Agriculture Commissioner Sid Miller has called for a statewide pause on big data center projects, according to Yahoo Finance.

The China factor

The national-security argument for building is stated plainly. CNN's Simone McCarthy said on Tuesday's broadcast of The Story Is that China has an oversupply of green energy, open land and "the power to build wherever and however it wants," while the U.S. faces a power crunch and local pushback. She noted America's edge in chips. President Trump has demanded the U.S. stay ahead.

American towns can't order a project built where Beijing could. What they can do is negotiate: abatements, upfront payments, size caps and siting rules. Loudoun County has already done that and is now drawing its own lines.

The next test is Trenton on Nov. 3. If Issue 17 passes, a court will likely have to decide whether it can reach an AWS project that is already being built and that the district's own forecast now depends on.