New study shows Kentucky data center could generate up to $435 million in local tax revenue

LOUISVILLE, KY. (WDRB) — A typical data center in Kentucky could generate hundreds of millions of dollars in local tax revenue and create thousands of jobs, according to a new report.

NetChoice released the report Thursday in collaboration with Commonwealth Economics Partners. The analysis looked at the potential economic impact of a typical 400-megawatt data center in Kentucky over its two-year construction period and first 10 years of operation.

The report estimates one data center could generate between $290 million and $435 million in city and county tax revenue over that 12-year period. Between $167 million and $222 million could go directly to local public school districts.

The state could also receive an estimated $230 million to $237 million in tax revenue.

Construction of a data center could create between 2,800 and 3,200 jobs during the two-year build phase, according to the report.

And once operational, the facility could support about 200 permanent jobs with an average annual salary of $105,000.

The researchers who worked on the study said that to account for differences across varying tax rates, they created five regions of six to nine counties and estimated the fiscal impact of the 400-megawatt data center.

The estimates were based on "average rates across each region's local taxing jurisdictions."

Data centers, like those across much of the United States, are a point of contention in Kentucky for their potential utility usage and impact on the environment.

Many Kentucky cities and counties, including Louisville, are implementing moratoriums on new data center projects until they can develop permanent regulations that will protect the community.

Gov. Andy Beshear also drew a line on Kentucky's data center boom at the state level. He said the executive order he signed this month sets strict new ground rules for tech companies wanting to build in the commonwealth.

Under the order, data center companies must prove that their project will not impact utility costs. It also prohibits electric companies from raising prices to cover the costs associated with data centers.

Click here for NetChoice's full report.