There is something about an Amazon data center that drives state and municipal officials to make mindboggling financial decisions. In recent years, governments across the country have handed the tech behemoth billions of dollars in tax breaks to bring massive data centers to their communities. In return, taxpayers receive little economic benefit and only a few new jobs while being forced to deal with noise pollution, resource depletion, and broken promises. With all the evidence demonstrating how Amazon continues to fail communities, we need to start questioning why these deals continue to proliferate.
Look at New Albany, Ohio. In September, Amazon announced its plan to build five more data centers in the Columbus-area town. The data centers will create a total of about 105 full-time jobs — or 21 jobs per data center. The facilities will total 1.25 million square feet – requiring one employee per 11,900 square feet. In exchange for these 105 jobs, the New Albany City Council approved a 30-year tax break for Amazon: 100 percent for the first 15 years and 75 percent for the subsequent 15 years. Instead of taxes, Amazon would pay New Albany a minimum of $352,750 per year, with that figure rising over time.
Amazon is not the only tech giant to reap the benefits of its status as a “megaproject” in Ohio in recent years. Intel’s semiconductor investment received strikingly similar incentives – a 30-year, 100 percent tax abatement. The difference? Intel’s plant will bring more than 3,000 jobs to Ohio.
It’s not just Ohio that has fallen prey to the allure of an Amazon data center. Earlier this year, Oregon’s Morrow County promised $1 billion in tax breaks to Amazon to build five new data centers in the state. The Beaver State has no limits on how much local governments can give away to businesses; while this was policy was implemented in the 1980s to encourage small manufacturing growth, tech giants have abused the system in recent years to dominate the program and its incentives.
Perhaps unsurprisingly, three former public officials in Morrow County have been charged by the state ethics commission because they stood to profit from the Amazon data centers when they granted the company its local tax breaks. They may have stood to gain, but Oregonians as a whole certainly did not.
Beyond the paltry economic return of data centers, there are serious quality-of-life issues — which Northern Virginia residents know all too well. The area is home to about 275 data centers, and the massive cooling fans needed to run these centers have disrupted neighborhoods due to the ever-constant noise they make. Residents have reported spending tens of thousands of dollars on soundproofing their homes to avoid the issues caused by nearby Amazon Web Services centers. Despite this noise pollution, Gov. Glenn Youngkin granted Amazon $140 million in incentives and 15 years of tax breaks to expand their data center presence in the state. State governments are failing their residents by allowing the expansion of these data center compounds.
On top of this, data centers are an immense drain on local resources. As the Department of Energy has noted, data centers consume up to 50 times the energy per floor space of a typical commercial facility. Overall, they account for nearly 2 percent of the nation’s energy use. They are also extremely thirsty, requiring as much 1 million to 5 million gallons of water per day to keep servers cool so they do not overheat. That’s equivalent to the water use of a town the size of 10,000 to 50,000 people.
Amazon is notorious for baiting governments into providing billions in incentives, only to fail to deliver on its promises of grandeur. Any state or local government considering offering these incentives to the tech giant needs to take a hard look at the facts and recognize the return on investment for residents is minimal at best. These data centers Amazon is so desperate to construct provide few job opportunities while encroaching on the quality of life for local communities. To cut a deal with Amazon at this point simply does not make sense.
