Gov. Hobbs says budget’s data center tax incentive moratorium is critical to better policy

A three-year moratorium on tax exemptions for Arizona data centers built into the state budget will be key in allowing the state to better shape policy around the centers, Gov. Katie Hobbs said Thursday.

“I think that will give us a really critical period of time to have these important conversations and make sure that we are coming up with a policy that ensures that data centers are working for Arizonans rather than the other way around,” Hobbs told KTAR News 92.3 FM’s Outspoken with Bruce & Gaydos.

“I know that affordability is a huge part of that conversation.”

Hobbs, a state Senator at the time, voted in favor of the exemptions when they passed in August 2013. Jan Brewer was governor at the time.

Hobbs said she’s heard concerns from Arizonans that a direct consequence of data centers in the area will be utilities going up, and she wants to make sure that the billionaires seeking to place the data centers aren’t making the less financially capable foot the bill.

The governor also emphasized the importance of data centers not going too deep into Arizona’s water coffers, especially when the state already has separate water concerns, such as drought and Colorado River intake.

“We have to make sure … that growth pays for itself,” Hobbs said. “We have to make sure that data centers are utilizing water efficiently and sustainably and not taking it away from the other uses that are as critical. Then (we can) address a lot of the community concerns that we’re continuing to see.”

The moratorium was one of the last hang-ups during budget deliberation. Hobbs initially sought a permanent ban on the exemptions, instead getting one lasting three years.

“While Arizona families are struggling with the affordability crisis, billionaire-owned data centers should not be getting special tax treatment,” House Democratic Leader Oscar De Los Santos said in a press release.

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