Data Center Backlash Hits Texas Races

Texas residents are rebelling against the state's rapid expansion of data centers, a conflict that has become a central battleground for the upcoming midterm elections. The industry has grown faster in Texas than anywhere else in the world, but public sentiment has shifted sharply against new construction.

An August poll indicated that 57 percent of Texans oppose building data centers. The opposition cuts across party lines, with 43 percent of Republicans, 75 percent of Democrats, and 54 percent of independents expressing negative views toward the industry.

Gary Bledsoe, president of the Texas NAACP, stated that the fight is the defining issue in the state. He cited specific local disputes, including a proposed facility on parkland in Taylor and recall attempts against city officials in Temple. San Marcos recently became the first city in Texas to ban data centers entirely.

Bledsoe helped form We the People Texas, a coalition of dozens of groups that he estimates represents up to 1 million voters. The coalition focuses on concerns regarding water consumption, tax subsidies, and the infrastructure required to meet rising electricity demands.

The state has historically favored the industry through tax incentives. A 2013 law passed under Governor Rick Perry exempted qualifying developers from state taxes on equipment and electricity for up to 20 years. Governor Greg Abbott expanded this exemption in 2015 to include hyperscale facilities. State officials estimated in 2025 that this break would result in $3.2 billion in lost sales tax revenue over a two-year period.

Financial pressures on residents are mounting alongside the expansion. Average electricity bills have risen by 35.4 percent over the last five years. The state's largest grid operator projects that data center power demand could grow nearly tenfold by 2030. Water usage also presents a challenge, as data centers consumed about 25 billion gallons of water last year, a figure the Houston Advanced Research Center expects to rise to 2.7 percent of the state total by 2030.

Governor Abbott has adjusted his position, directing the Public Utility Commission to require operators to cover infrastructure costs and announcing permit moratoriums pending audits. He also indicated support for repealing the sales tax exemption. However, critics argue the audits exclude off-grid projects. An October investigation by Public Citizen and FracTracker suggested permits were still being processed, a claim Abbott's office denies.

In the gubernatorial race, Democrat Gina Hinojosa has taken a narrow lead in some polls after calling for a moratorium until new protections are passed. Miriam Cobb, cofounder of the Texas Coalition Against Data Centers, doubts Hinojosa's stance, noting that the International Brotherhood of Electrical Workers, a major donor, has aligned with data center developers. Cobb intends to write in an independent candidate.

In the Senate race, Republican Attorney General Ken Paxton, who originally voted for the tax exemptions in 2013, now supports repeal. He has launched investigations into water use and the Taylor parkland case despite receiving hundreds of thousands of dollars from the industry this year. His Democratic opponent, James Talarico, promises to prevent utility bill increases and give local communities a say in hosting facilities. Advocates note the Senate race remains too polarized for this issue to be the sole deciding factor.