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Business and labor groups push lawmakers to pass tax incentives for data centers

SPRINGFIELD, Ill. (WEEK) — A group of business and labor groups are lobbying lawmakers in Springfield to create new tax incentives for the data center industry.

Data centers serve as hubs for the storage and transmission of data. They’re also used to network smartphones, tablets, and GPS systems.

Thirty states currently offer tax incentives to attract data centers. A study by Magnum Economics said a large data center could bring 3,360 jobs, $203.9 million in labor income and $521.7 million in economic input to the state. That would generate about $66.7 million in tax revenue.

Much of the current data center activity in the state is centered around Chicago and its suburbs. Data centers in Atlanta, Northern Virginia and Phoenix are currently growing at a faster rate than Chicago, the study found.

The study’s authors argued Virginia also once saw data centers highly concentrated in a certain part of the state before incentives were offered.

As a case study, Magnum looked at McLean County. With three interstates and a large amount of fiber already laid, Magnum said McLean County would be able to support a large data center with 50 jobs worth about $3.5 million. The center would generate 2,088 construction jobs and $118.4 million in construction wages as well, the study found.

Magnum estimates the ripple effect from the data center would generate 3,132 jobs, $165.2 million in labor income, and $417.5 million in economic input. That would equal $49.3 million in new tax revenue, including $15 million in new local and state taxes.

“With the legislative session coming to a close, Illinois policymakers have the chance to strengthen our tech ecosystem by giving our rural communities a shot at the digital economy,” said Tyler Diers, director of legislative relations, Illinois Chamber of Commerce in a prepared statement. “Passing a data center incentive will help attract the capital investment and high-performance jobs that can put downstate Illinois on the path to an economic renaissance.”

The Illinois Senate has already passed a tax incentives bill for data centers. The legislation awaits House action.

The study was commissioned by a group of business organizations, including the Illinois Chamber of Commerce Foundation.

Tim Shelley

Social Media & Digital Content Manager

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