How a Washington Tax Break for Data Centers Snowballed Into One of the State's Biggest Corporate Giveaways

[Passages]

Companies have saved $474 million since 2018, with most of the windfall going to Washington-based tech giant Microsoft. Lawmakers repeatedly expanded who qualifies, and they lowered the number of jobs expected in return.

by Lulu Ramadan and Sydney Brownstone, The Seattle Times, photography by Karen Ducey, The Seattle Times
Aug. 4, 5 a.m. EDT

In 2010, as the country still reeled from the worst economic crisis since the Great Depression, tech companies, real estate developers and rural lobbyists went to the state Capitol in Olympia, Washington, to press for a tax break for data centers.

Turning it down, supporters argued, would mean rejecting high-paying, long-term and environmentally friendly jobs in distressed parts of rural Washington. Owners of data centers — gargantuan facilities filled with computer servers that power the internet — were scouting Washington and other states for new homes.

“In the end,” then-state Sen. Rodney Tom, a Democrat from the Seattle suburbs who advocated for the tax break, told his Senate colleagues, “we get the clean jobs that all the states are competing with, as far as the jobs it takes to run these things long term.”

SNIP
The only state audit ever released publicly, seven years ago, found that based on the number of tax break recipients at the time, data centers could eventually meet the jobs requirement by collectively hiring as few as 260 workers. The average annual cost to the state at that time was projected to be $53.3 million between 2015 and 2019.
https://www.propublica.org/article/washington-data-centers-tech-jobs-tax-break

[lapfog_1]

1. The trend since the late 1990s is "lights out" data centers.

i.e. no people inside. First off they are toxic environments to work in, what with the noise from A/C units and the huge collections of computer servers. Second, for almost all things that happen in a data center, they don't need any human hands on interaction. Installation / replacement, network upgrades, and certain operations require people to enter and service equipment, otherwise everything else can be done remotely. Today there is even a move to simply over provision a data center with "hot or cold spares" where extra servers are installed... and if another server fails for some reason, the functions that server was doing are simply moved to the spare. This can go on until the entire set of servers are retired and replaced.

The number of "high tech" jobs provided by a date center is actually pretty minimal.

They consume a lot of electricity and, usually, water for evaporating cooling ( even if the servers are not directly water chilled, the coolant or air exchangers eventually need evaporating cooling ).

In my view, if you really want fission nuclear power... go to Canada or Alaska, in a place with almost no human habitation, build nuclear power plants and huge data centers, use the available water source and try to reclaim as much of it and return it to the environment ( stream or river ) at the same or nearly the same water temp as when it was extracted. Pay the people that work there an enormous amount of money to live there and do the jobs we cannot do via robotics or remote operation.

[Wonder Why]

2. I have always believed that states competing for companies by offering tax breaks and other specific inducements

should be prohibited from doing so. This is not to say that offering to build roads, provide water or sewer or similar state functions should be allowed - as long as these would serve other users.

Similarly, if a company selects a state then that state's cities should be prohibited from competing with each other in like manner.

In any case, any commitment by states and local governments should be made only based on specific publicly announced commitments that earn the benefit and are not paid until after the company has met its commitment.

As to bringing business to the United States, only the federal government should be allowed to offer benefits - and the same rule applied.