Illinois Governor JB Pritzker announced his administration will temporarily cease offering tax breaks to data centers applying to build in the state. The executive branch will pause processing applications to the tax incentive program beginning July 1.
Pritzker plans to call on lawmakers and other groups to develop a comprehensive framework for data center development during the fall veto session. The governor cannot unilaterally halt the data center tax incentive program, but the executive branch retains authority over processing applications. He previously called on state lawmakers to suspend data center tax incentives for two years; however, lawmakers did not act on that proposal.
"Illinois has an opportunity to continue leading in technological innovation and economic growth, but we also have a responsibility to protect working families and local communities as the data center industry rapidly expands," Pritzker said. "I am directing my administration to pause the processing of data center agreements while we continue working with the General Assembly and stakeholders on a comprehensive framework that protects affordability, safeguards our natural resources, and ensures responsible growth across Illinois."
He will ask the Legislature, labor groups, utility companies, local governments, and industry leaders to develop reforms for data processing center development. These proposed reforms include requirements for data centers to contribute to state and local revenues, protect natural resources, and maintain energy grid reliability. The governor advocates for policies requiring communities to receive advance notice of projected water and electricity consumption by data centers.
The governor has stated that the state must assess the impact of data center construction on consumer utility bills and water consumption. The data center tax incentive program is administered by the Illinois Department of Commerce and Economic Opportunity. Multiple states have introduced legislation to limit data center construction or end related tax breaks. He is running for a third term as governor.
No independent assessment of JB Pritzker’s claims was available.