Illinois Gov. JB Pritzker is expected Wednesday to call for a two-year suspension of tax incentives offered to develop data centers amid growing scrutiny over their rapid expansion and impact on communities.
Pritzker plans to advocate for a policy shift in his State of the State and budget address in Springfield under a proposal first shared with NBC News.
At the center of the plan is a two-year pause, effective July 1, on Illinois’ data center tax credit program. Pritzker will instruct key state agencies to study the impact of existing data centers on the state’s energy grid and consumers and analyze the financial impact the centers have had on the economy. Specifically, the governor’s office said it is trying to make sure the centers are financially sustainable over time, protect consumers from soaring energy costs and ensure fair allocation of resources.
Illinois’ Democratic-led General Assembly must approve Pritzker’s proposal.
Data centers are massive structures that run computer servers that power the growing demands of artificial intelligence. Illinois would be hitting pause on their proliferation as community backlash intensifies across the country, with residents from Oregon to Virginia to Indiana calling on local officials to rein in data center development amid rising electricity costs and water consumption.
While a number of states are rushing to create incentives for companies to build data centers, some governors — including potential 2028 candidates — have also moved toward more oversight. Pennsylvania Gov. Josh Shapiro, a Democrat, recently announced a set of criteria for data center developers to qualify for state resources, and Florida Gov. Ron DeSantis, a Republican, has put up some guardrails around data center growth.
