Idaho’s data center debate raises questions about lobbying and tax breaks

By Lauren Necochea
Reader Contributor

Idaho deserves leaders who study the bills instead of simply deferring to the lobbyists pushing them. The debate over data centers shows why that matters.

The 2020 legislative session was my first as a state representative, and I was lobbied hard to support a valuable sales tax exemption for data centers. The pitch was slick. One lobbyist told me data centers would jump-start our tech industry and create new economic activity. Another warned that, without the exemption, data centers simply would not come.

I wanted another perspective. I reached out to an industry expert who was not being paid by the corporations that stood to benefit. He described data centers as the “supply closet” of the tech world, not engines of innovation that would bring new businesses to Idaho.

I also looked at what these facilities require — particularly land, water and electricity — and what Idaho would receive in return. Data centers are largely buildings filled with servers, with relatively few permanent employees compared with their footprint and investment. 

There may be places in Idaho where data centers make sense, but I concluded there was no compelling reason for the state to give them a tax advantage over other businesses already operating here.

I voted “no.” Most lawmakers went the other way. The bill passed and Gov. Brad Little signed it into law.

As it stands today, while you pay sales tax on essentials like food, medicine and diapers, qualifying data centers receive that exemption.

Those projects are now arriving at a scale few people imagined then. Meta has built a major facility outside Kuna. Another company received approval for a nearby 620-acre project. Neighboring farmers are now challenging it before the Idaho Supreme Court. In Pocatello, strong public opposition blocked another proposed data center, at least temporarily.

Efforts to rein in the tax break for billion-dollar data center companies have failed. Nationally, Republican politicians are also rushing to defend the industry. President Donald Trump has said communities that reject data centers will end up “backwards and poor.”

This is the risk when lawmakers depend too heavily on lobbyists instead of feeling accountable to the people they represent. It is especially pronounced in the Idaho Statehouse, where Republicans hold 86% of the seats.

Look at who funds their campaigns. Many Republican candidates rely heavily on contributions from corporations, industry groups and other special interests with business before the Legislature. Democratic candidates draw most of their support from individual Idahoans investing in the future of their state.

However you feel about data centers, ask yourself this: When you cast your vote in November, who should your leaders feel accountable to? Interests with deep pockets hoping to get richer, or the people of Idaho?

Lauren Necochea is chair of the Idaho Democratic Party and a former District 19 legislator. Necochea spent a decade leading nonprofit programs dedicated to research and advocacy in tax policy, health care and children’s issues.