Diggin' technology every day

March 21, 2011

Please do not extend Data center tax breaks

Filed under: Datacenter,News — Tags: , — Nate @ 9:20 am

This is just disgusting to me. It pissed me off when it passed the first time and it is even more stupid and crazy if it happens to pass again.

Just read on DataCenterKnowledge that Washington state (where I am) has someone(s) proposing a bill that would extend data center tax breaks for another 10+ years.

This, in a time where the state forecast just last week an even larger state budget deficit.

Key lawmakers now turn their full attention to writing budgets for the 2011-2013 cycle. Revenue is expected to be down for that budget by an additional $700 million, Thursday’s forecast said. Now, the deficit is estimated to be about $5.1 billion, but that includes voter-approved mandates that lawmakers don’t plan to fund.

The big issue I have with this data center tax break is these data centers really don’t contribute much. They have a short term gain in construction jobs but operationally they employ hardly anyone and they consume an enormous amount of energy and water requirements for cooling.

Take a look at this $1 billion Apple data center for example –

Tax breaks could total $300 million for 50-employee server farm in North Carolina

If your going to give tax breaks, give them to businesses that actually generate jobs. There should be some sort of rule, # of jobs per square foot, or # of jobs per $ in tax break or something. Data centers are a waste for tax breaks, let them go somewhere else.

The original tax break to data centers was approved right after the state announced a $1 billion tax increase on the rest of the state.


  1. Hey, you could always live in California — our state government is even more screwed up.

    Comment by Tony — March 21, 2011 @ 10:32 am

  2. thanks for the comment! Yeah that is true, I grew up in California though haven’t lived there since the 90s. It is interesting to see what is going on down there, quite sad too.

    Comment by Nate — March 21, 2011 @ 10:44 am

  3. Just this weekend I wondered what Philip Greenspun was up to. He’s blogging a lot about pork barrel politics. Good stuff.

    Over here in Blighty (think about that oh so affectionate term for England, for a moment) we have a thing called PFI, Private Finance Initiative.

    So, the gummint says to corp, “hey, you finance the build of such and such a hospital / school / transit system, and we’ll pay you as we go”

    Only problem is, the Gov guaranteed these projects, so the corps get near zero rate loans. They need virtually zero capital to set up shop, like a big LBO house on wall street, and the rentals are so back end loaded the true cost is many many many times what was told to the public.

    Example: Labor government says “we invested 60 BLN in hospitals”. Actuality, 5 BLN was put up front, and the rental to term will cost at NPV 300 BLN. Bear in mind the Gov could have borrowed just as cheaply.

    We have the dangerously unpleasant situation here where one set of people living off the government on social benefits is violently protesting against the robber barons, and anyone with common sense is left in the middle, targets on their butts.

    I’m brushing up on International Sovereign Treaty Law and wondering how i’d look with a full Robinson Crusoe beard! Sounds like my hypothetical island might have a vibrant American population if it could only be made to happen 🙂


    – j

    Comment by John (other John) — March 28, 2011 @ 8:52 am

  4. […] generate when they come to town (i.e. not many, certainly not enough worthy of tax breaks like Washington state was doing) Microsoft will invest an additional $150 million to expand its new data center in southern […]

    Pingback by Real picture of Microsoft IT PAC « — September 25, 2011 @ 10:42 am

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.

Powered by WordPress