{"id":7,"date":"2026-05-08T06:41:23","date_gmt":"2026-05-08T06:41:23","guid":{"rendered":"https:\/\/phoenixrelocationnews.com\/?p=7"},"modified":"2026-05-08T06:41:23","modified_gmt":"2026-05-08T06:41:23","slug":"gallego-strikes-middle-ground-on-necessary-evil-arizona-data-centers","status":"publish","type":"post","link":"https:\/\/phoenixrelocationnews.com\/?p=7","title":{"rendered":"Gallego strikes middle ground on \u2018necessary evil\u2019 Arizona data centers"},"content":{"rendered":"
\n

It is all the rage to hate data centers. Democrats and even many Republicans are skeptical of them due to their high energy and water demands, meager job creation and general ugliness when placed in communities. Others argue they are crucial investments in the country\u2019s technological supremacy.<\/p>\n

Read more Hello world!<\/a><\/p>\n

Arizona Sen. Ruben Gallego is trying to strike a middle ground.<\/p>\n

The Democrat has called data centers a \u201cnecessary evil\u201d that the country will need in order to keep up with the AI arms race against China and other countries. However, he said Thursday that he\u2019s less than willing to roll out the red carpet for data centers in Arizona, arguing that they shouldn\u2019t receive tax breaks they\u2019ve long enjoyed in the state.<\/p>\n

Gallego discussed his views with reporters Thursday morning after an event at the southeast Phoenix Veterans of Foreign Wars Post 720 to promote his support of the Richard Star Act, which would extend full benefits to all medically retired combat veterans. Afterward, Phoenix New Times asked Gallego about his previous comments on data centers and how he balances them with the loud grassroots backlash against such projects.\u00a0<\/p>\n

\u201cYour local resident should be held harmless. We shouldn\u2019t be paying more in electricity bills because data centers are here,\u201d Gallego said, adding that he agreed with what residents are feeling and that \u201cwe can find a compromise.\u201d<\/p>\n

That compromise? Having wealthy tech companies and data center developers actually pay their fair share. The \u201cdata center and the hyperscalers have to actually want to be a part of that,\u201d Gallego added.<\/p>\n

In 2013, Arizona lawmakers passed a statewide tax exemption intended to attract data centers to the state. The exemption provides tax breaks for equipment purchasers and operations that meet a minimum capital investment threshold within five years of applying for the program. To qualify, facility owners must invest at least $50 million in projects in Maricopa and Pima counties, or at least $25 million in the state\u2019s 13 other counties. The exemption lasts up to a decade for most projects.<\/p>\n

The program worked, but perhaps a bit too well.<\/p>\n

The tax break, which is set to last through 2033, has cost the city of Phoenix more than $12 million in revenue a year, a city-sanctioned audit showed. Now, officials, including Gallego, are calling for that exemption to be rolled back.\u00a0<\/p>\n

While Gallego has said he believes the future of the economy will be driven by AI, that doesn\u2019t mean handing out a blank check to the companies that open these facilities. Some data centers, Gallego said, \u201cend up paying, on average, less than some of the homeowners who are right next to them.\u201d<\/p>\n

\u201cThat\u2019s not a good deal,\u201d he added. \u201cThere can be a good deal when it comes to residents and data centers. That\u2019s not what we\u2019re seeing right now.\u201d<\/p>\n

\n

Support for nixing tax breaks<\/h2>\n

Both Phoenix Mayor Kate Gallego (the senator\u2019s ex-wife) and Arizona Gov. Katie Hobbs have also both supported a rollback, with Hobbs demanding a repeal of the exemption in state budget talks.<\/p>\n<\/div>\n

\u201cThe amount (of data centers) that are coming in is a problem to me,\u201d Gallego added. \u201cI fear that we may not have enough water and we may not have enough power generation to be able to hold harmless everyone else.\u201d\u00a0<\/p>\n

Gallego also called some data centers in the Valley \u201cabusive\u201d for using state tax benefits to build eyesores in \u201cvery dense or very valuable areas\u201d without long-term, thoughtful use of their impact on water and other resources. \u201cThat\u2019s not fair to our communities,\u201d he said. Instead of benefitting from state tax benefits, data centers \u201cshould be bringing their own energy or compensating the individual rate payer for that,\u201d Gallego argued. He also believes state and local governments should have more control over where these facilities are placed.<\/p>\n

The rapid growth of data centers in the Phoenix area has become a flashpoint for many community members who don\u2019t want massive, windowless warehouses that bring few jobs but suck up high amounts of energy and water. According to the Data Center Map, there are 176 data centers in the Phoenix area, with large concentrations in southeast Mesa, south Chandler, Goodyear and north of Luke Air Force Base in Surprise.<\/p>\n

Additionally, nearly 20 more facilities are expected to open in the coming years. The region now has the country\u2019s highest concentration of data centers outside of Northern Virginia.<\/p>\n

Community-led high-profile local fights have broken out against Project Blue in Tucson, against a Kyrsten Sinema-supported data center in Surprise and against facility in Ahwatukee. Those efforts have had limited success \u2014 of those three, only the Chandler project was scuttled due to community pushback.\u00a0<\/p>\n

More recently, community members rallied against Project Baccara, which would be built in an unincorporated area of Maricopa County south of Surprise. The 160-acre site, which will have two data centers and a gas power plant, is just north of Luke Air Force Base. On Wednesday, despite loud pushback from residents, the Maricopa County Board of Supervisors approved a military compatibility permit for that project by a 4-1 vote, as required by state law for development near military bases.<\/p>\n

\n

Gallego was also asked on Thursday about the status of the Senate Ethics Committee investigation, stemming from a complaint lodged by Republican Rep. Anna Paulina Luna on behalf of an anonymous accuser. The complaint came in the wake of sexual misconduct allegations against Rep. Eric Swalwell, Gallego\u2019s self-described \u201cbest friend\u201d in Congress. Gallego initially defended Swalwell before backtracking, saying he was \u201cbetrayed\u201d by his friend and claiming he had no idea the inappropriate activity was occurring.\u00a0<\/p>\n

Gallego confirmed to reporters that he met with the committee to \u201cproactively\u201d give them any needed information because \u201cwe feel like there\u2019s nothing to hide.\u201d He added there have been no \u201cspecific allegations\u201d and said the complaint stemmed from a \u201cbunch of right-wingers just trying to throw stuff in the air.\u201d<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Arizona Sen. Ruben Gallego said he isn’t against data centers, but he thinks it’s time to take away their tax breaks.<\/p>\n","protected":false},"author":1,"featured_media":6,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[],"class_list":["post-7","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-politics-government"],"yoast_head":"\nGallego strikes middle ground on \u2018necessary evil\u2019 Arizona data centers - Phoenix Relocation News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/phoenixrelocationnews.com\/?p=7\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Gallego strikes middle ground on \u2018necessary evil\u2019 Arizona data centers - Phoenix Relocation News\" \/>\n<meta property=\"og:description\" content=\"Arizona Sen. 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