Future data center tax breaks on hold

Despite the governor mentioning a pause on data center tax breaks at his budget address in February and a massive swell of political will to regulate the energy-hungry centers since then, Illinois lawmakers did not meaningfully address data centers during their spring session.

Gov. JB Pritzker, less than a week after legislators left Springfield, ordered a pause on all future data center tax break agreements starting July 1. That effectively gives CyrusOne – the international data center operator that plans to break ground in Sangamon County this summer and all other data center projects approved in recent months – a hard deadline to get agreements signed with the Department of Commerce and Economic Opportunity.

Environmental and public health nonprofits praised the move while labor unions and the Illinois Manufacturers’ Association questioned the governor’s decision, claiming the pause is an overreach of authority. The International Brotherhood of Electrical Workers referenced Pritzker’s support of the tax break program in 2019.

“If the governor believes the law should be changed, he should work with the General Assembly to change it. He should not direct an agency to stop administering a program simply because the legislature did not pass his preferred proposal,” IBEW stated. “In 2019, Gov. Pritzker stood with legislators, business leaders, labor leaders, trade groups and data center businesses to celebrate this very program. At that time, he said data centers were ‘as critical a part of our infrastructure as our roads, trains and schools’ and praised the incentive as a way to welcome ‘a surge of economic development, labor income and good union jobs to Illinois.’”

In late May, more than 40 lawmakers signed a letter to House and Senate leadership urging the pause of tax exemptions that have provided 27 Illinois data centers, some owned by the same parent company, with nearly $1 billion in tax breaks since 2019. Those data centers produced an average of 22 permanent jobs, and anywhere from 150 to 300 construction jobs per site.

“A policy intended to attract investment has now left Illinoisans with record spikes in utility bills, strained our regional power grids and raised significant concerns among our local constituents,” the letter states. “Data center development may remain a promising economic opportunity for our state, but it cannot come at the expense of Illinoisans’ utility bills, public resources or community health.”

Only Democrats, who have a supermajority in the Illinois legislature, signed the letter. State Sen. Doris Turner, D-Springfield, and Rep. Sue Scherer, D-Decatur, did not sign the letter, and neither responded to multiple emails from IT about it.

A vast majority of states offer similar tax breaks, but outrage from constituents has caused some politicians to reconsider some generous exemptions and pushed others without such tax benefits to avoid instituting them. Ohio Gov. Mike DeWine, a Republican, recently paused the state’s data center tax breaks on May 27 while a legislative committee examines the program’s effectiveness.

At a rally during the final weekend of Illinois’ legislative session, lawmakers in support of regulating data centers acknowledged a bill would not pass before adjournment, saying it takes time to regulate such a massive, fast-changing industry.

“This is a big bill for a big problem, but big bills and big solutions take a lot of work. Big solutions take coalition building. Big solutions take persistence,” said Sen. Ram Villivalam, D-Chicago. “We can’t let up now.”

Meanwhile, activists decried the Statehouse’s inaction as kowtowing to wealthy corporations.

“We’re going up against some of the most powerful corporate interests in the world,” said Christine Nannicelli, senior campaign representative for Sierra Club Illinois. “Big Tech corporations have the ear of too many local officials, and they certainly have the ear of state legislative leadership.”

The Rev. Darnell Tingle, from United Congregations of Metro East, a group of faith leaders in Southern Illinois who support public interest issues, said corporations are “trying to move faster than democracy” in getting expansive, hyperscale data centers built.

“We will make sure lawmakers understand that delay is not neutral. I repeat, delay is not neutral because inaction is a choice. Delay is a choice. Leaving communities exposed is a choice,” Tingle said. “We are not anti-technology, we are not anti-job, we are not anti-development, but we are against exploitation dressed up as a permit – and exploitation with a permit is still exploitation.”

Tingle said developers and elected officials are failing to listen to community input related to data centers.

“Data centers are coming. They’re being proposed, they’re being negotiated, and they are being approved,” he said. “Too many communities are being forced to respond one city at a time, one village at a time, one zoning meeting at a time. That is not a strategy, that is a setup. While regular people are still trying to figure out what is happening, the lawyers have already met, the developers are already called, the lobby is already moved and the paperwork is already in motion. That is why we need the POWER Act; we need statewide standards.”

The POWER Act (Protecting Our Water, Energy, and Ratepayers), which stalled in the General Assembly, would have required companies building hyperscale data centers to fund their own clean energy, perform environmental and water impact assessments, and pay into a public benefits fund.

Prairie Rivers Network, an Illinois nonprofit focused on protecting nature and wildlife, claimed the Illinois legislature chose to support Big Tech over voters by not taking action on the POWER Act. The group called on the legislature to convene in June to discuss the matter, though there’s been few signs of a special session, and reiterated its dedication to slowing the rapidly expanding industry that is attempting to plug into electric grids as quickly as possible.

“The legislature chose data centers over the public interest,” read a Prairie Rivers Network statement following adjournment. “Pausing the data center tax incentives would have forced data center developers and their allies in labor to come to the negotiating table with us. It would have shown the data center industry that the Illinois legislature was ready to protect the public from data center impacts.”

The statement concludes, “Join us this summer in attending town halls, writing letters to the editor, attending local zoning and county board meetings and calling our legislators to take action.”

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This article appears in June 25-July 1, 2026.