Data centers emerge as midterm flashpoint in Arizona and beyond

PHOENIX (AZFamily) — Data centers are no longer just a local zoning fight. Heading into the midterm elections, the server farms powering the artificial intelligence boom have become a prominent talking point in campaign attack ads and a rare issue that doesn’t separate neatly along party lines.

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A recent Gallup poll found more than 70% of Americans do not want data centers built in their area. Politico analyzed more than 100 campaign ads mentioning data centers this cycle, and found not one of the candidate-run spots presented data centers in a positive light. The ads have run in an Ohio Senate race, Michigan’s 7th Congressional District and the Pennsylvania governor’s race.

“Most people think ideology is a straight line, right? You’ve got Republicans on the right and Democrats on the left, and really it’s a circle,” Phoenix political consultant Marcus Dell’Artino said on the latest episode of “Generation AI.” “We’re starting to see the end of that tip of that circle where the Republicans and the Democrats are meeting about this.”

The shifting ground around data center politics is on display in Pennsylvania, where the state’s Democratic governor, Josh Shapiro, signed an executive order in August restricting what he called predatory data center projects.

Gov. Shapiro had previously championed the industry. Republican challenger Stacey Garrity has seized on it, and both candidates are now running ads accusing the other of being too friendly to data center developers.

Data centers emerged on the campaign trail in Arizona this week, when Attorney General Kris Mayes called for a one-year moratorium on data center construction. Dell’Artino cautioned that Mayes, a Democrat running for reelection, cannot impose one on her own.

“She alone does not have the power to say no more data centers,” he said, calling it smart politics from a candidate who spent years on the Corporation Commission handling power, water and consumer issues.

In response, Gov. Katie Hobbs stopped short of endorsing a construction pause. In a statement, her office said Hobbs “has made clear she wants data centers to work for Arizonans, not the other way around,” and noted she already secured a three-year moratorium on the data center tax credit.

The governor wants to “permanently end the data center tax credit, make data centers pay their fair share for the water they use, and to stop increases in utility bills due to their energy use,” the statement said, adding that her office is “already exploring ways to deliver more action on data centers to lower costs and protect Arizona’s water future.”

Republicans like Senate President Warren Petersen also touted the tax credit moratorium while declining to back a construction pause. Petersen is challenging Mayes in November.

“Kris Mayes says she’s fighting high utility bills, but Arizona families should look at her record,” Petersen wrote, pointing to rate increases she voted for on the Corporation Commission and her work on Proposition 127, the 2018 renewable energy mandate that Arizona voters rejected.

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“Arizonans deserve an Attorney General who protects their wallets,” Petersen wrote, “not a career politician who constantly changes positions based on how the political winds blow.”

A spokesperson for the Senate Majority Caucus called the proposal an “election-year distraction.”

“Mayes does not have an actual proposal,” the spokesperson said. “Policymaking is the Legislature’s job, and if she has a serious plan, she can bring it to lawmakers and go through the appropriate legislative process.”

The spokesperson also noted that Senate Republicans voted unanimously to end what they called a “sweetheart tax exemption” for data centers, one that Hobbs voted to establish as part of a broader budget package when she was a state lawmaker in 2013.

While there may be strong activism in the anti-data center movement, Dell’Artino said the populist rhetoric has outrun the facts on water. Older data centers were heavy users, he said, but newer ones rely on closed-loop cooling and use no more water than a manufacturing plant. “Is it fair to single these guys out?” he said.

Whatever the outcome of the elections in November, Dell’Artino expects the fight over data centers to return to the state Capitol next session.

Lawmakers introduced a wave of data center bills last session and reached a deal on the tax credit moratorium only in the final budget negotiations, he said. He predicts more proposals to regulate the facilities regardless of which party controls the Legislature.

Generation AI airs Wednesday nights on AZ Family+.

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