Effingham County, Georgia, is moving forward with a plan to cut property taxes for primary residents by an estimated 40%, funded by the sale of land for a planned $20 billion OpenAI data center. County commissioners are expected to vote Tuesday on a measure providing six mills of property tax relief, with construction of the facility not slated to begin until 2028.
The deal marks the largest property tax cut in the county's history, according to officials. OpenAI would receive a 50% property tax abatement for 15 years but would still become the county's biggest taxpayer, paying hundreds of millions of dollars in total taxes over that period. The company has also pledged $80 million in community benefits.
Data centers face growing local resistance
Not everyone in Effingham County is celebrating. Sen. Raphael Warnock, a Georgia Democrat, said locals have "serious concerns" about the project, citing potential for "higher utility costs and more water, light, and noise pollution." The opposition reflects a national trend: polls show about 70% of Americans oppose construction of data centers in their area.
Some state officials are responding to the backlash. Ohio and Illinois have both paused state tax incentives for new data center projects. Illinois Gov. J.B. Pritzker approved sizable incentives in 2019 but has now suspended them until the state develops a framework that "protects affordability" and "safeguards our natural resources."
President Donald Trump weighed in Monday on Truth Social, writing that communities should welcome data centers if they want to be "successful and rich, with far lower taxes and jobs all over the place."
When property tax relief actually materializes
There are documented cases where data center tax revenue has translated into lower residential property taxes. Loudoun County, Virginia - home to roughly 250 data centers - has reduced property taxes by about 30% over the past decade. Tax dollars have also funded schools, roads, bridges, and a $102 million recreation center.
In Quincy, Washington, property taxes have been cut by about 70% over two decades, mostly because of data centers. The rural town has used the surplus to build new water treatment facilities, schools, a police and fire department, and a new city hall, according to Jared Walczak, president of Walczak Policy Consulting and a senior fellow at the Tax Foundation.
"The issue comes down often to whether a data center is paying those property taxes or if it's been abated," Walczak said. "Some communities, especially a decade or so ago, were trying very hard to attract data centers, so they often abated much of the property tax burden. These days, that's much less likely to happen."
The catch: exemptions can erase the benefit
The primary complication is that governments usually offer large tax incentives to attract these projects in the first place. Exemptions eventually sunset, but some last up to 40 years. More commonly, they run 10 to 15 years.
Critics argue the abatements amount to handouts. "Unfortunately, because so many local policymakers have been fooled into believing that data centers, in and of themselves, constitute economic development, they've actually been willing in many cases to waive ... the one conduit through which data centers might actually inject income into those communities," said Sean O'Leary, a senior researcher focused on energy at the Ohio River Valley Institute.
Job gains from data centers are also mostly temporary. Construction can require thousands of workers, but once the facility is built, staffing needs drop sharply. "Everybody then goes home, and the community is left no better off than it was before, except perhaps for some taxes," O'Leary said.
A city manager's counterpoint
Hermiston, Oregon, which hosts three Amazon Web Services hyperscale data centers, now collects millions of dollars per year from Amazon. The money funded a $10 million city hall rebuild after a fire, a $3 million library renovation, and a $5 million public safety center expansion.
"Just the amount that Amazon paid in taxes and fees in lieu of taxes last year was more than our top 12 other property taxpayers combined," said Assistant City Manager Mark Morgan. He dismisses arguments about revenue "foregone" through exemptions: "I essentially write that off entirely because we can't give away something we never had in the first place."
Morgan said the city might be able to negotiate better terms today, given the scarcity of available sites. But he has no regrets about the 15-year deal struck in 2019. "If not for these dollars, I'm not sure where those dollars would have come from," he said.
Why this matters for real estate and construction
For professionals in AI for Real Estate & Construction, data center deals like Effingham County's are reshaping local tax bases and infrastructure budgets. The projects create short-term construction demand but long-term changes to property tax structures that can affect residential values, commercial development, and municipal spending priorities.
Understanding how these abatement agreements are structured - including the length of exemptions, fee-in-lieu arrangements, and community benefit pledges - is becoming essential for anyone evaluating land deals, development pipelines, or property tax exposure in counties where data centers are proposed or under construction.
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