Maine lawmakers are considering a new bill that would exclude new data centers from tax breaks that encourage job creation and equipment investment
The proposal comes as communities across Maine grapple with proposals from facilities that help power artificial intelligence and other online services but are criticized for their massive demands on energy and water.
Sen. Nicole Grohoski, D-Ellsworth, on Wednesday told members of the Legislature's Taxation Committee that the developments should not qualify for two tax break programs enacted to boost economic development.
"Both programs were designed with a certain type of business in mind, one that makes deep capital investments and generates long-term quality employment in Maine communities," Grohoski said.
"The question this amendment asks is a fair one; do data centers fit that profile?" she added.
The bill would exclude data centers from Maine's Business Equipment Tax Exemption, or BETE, program which provides 100% break on eligible property.
It would also prohibit participation in the Dirigo business incentives program that can deliver a 10% capital investment credit on equipment, machinery and building construction and offers $2,000 benefit per worker enrolled in an approved job training program.
Grohoski said data centers do not require a large workforce to operate. Other states that offered financial incentives to lure data centers have reported losing money on the deals, she added.
The bill would also require the Maine Department of Economic and Community Development to study from what other state-level incentives potential data centers could benefit.
Grohoski said the bill was not a statement that a data center should never be built in Maine, just that they should not be able to take advantage of those programs by default.
"If data centers belong in our conversations about economic development let's make that case deliberately and design something that works for Maine people, Maine communities and our fiscal future," Grohoski said.
But Jason Shedlock, President of the Maine Building Trades union organization told lawmakers to be cautious of the bill as written. The debate around data centers often focuses on issues of energy and the environment, but not the jobs created to build the facilities, he said.
"When we talk about permanent jobs, that complete discounts the construction industry," Shedlock said.
The Legislature is already considering a temporary moratorium on new large data centers to give time to study the issue and come up with Maine-specific guidelines for developers, Shedlock added. A panel of lawmakers advanced the moratorium last week, but it faces more votes in the House and Senate.
"As we study this, it is much harder to put something back in and change it than to make sure that we address something that is probably not going to be taken advantage of anyway because of the moratorium," Shedlock said.
