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Altoona, Iowa Mayor Dean O’Connor was early to the data center trend. O’Connor was a newly-elected city council member when the Des Moines suburb landed a 1.5 million square-foot Meta campus in 2013.
“This was back when we were all fighting for data centers,” O’Connor told Straight Arrow. “Hindsight is, everybody has a data center now.”
When asked by Straight Arrow how Meta has benefited the city, O’Connor highlighted increased government revenues and water infrastructure investments the company made. And he acknowledged that relative to the overall capital investment — more than $2.5 billion, according to Meta — the number of direct jobs created is small.
Over the past year, data centers have electrified public debate around everything from power bills and water consumption to the stock market and America’s competitiveness with China. Proponents of data center development from county commissions up to the White House often tout job creation, despite mixed signals on how many permanent roles the data center boom will actually create. But for some communities, the ratio of high tax revenue to more modest job creation is exactly why they want data centers to come.
“Data centers don’t employ thousands of people once they’re operational, and I think it’s important to be honest about that,” said Swarnjit Singh, mayor of Norwich, Connecticut.
Norwich is home to a Computer Science Corporation data facility, and three sites are in development by Gotspace Data Partners.
Singh told Straight Arrow that “the value of a data center shouldn’t be measured only by permanent employment,” instead pointing to tax revenue, infrastructure investments and the ripple effect of a data center attracting other industries.
“This isn’t about choosing between jobs and tax revenue — it’s about creating a stronger fiscal foundation that allows us to invest in our community,” Singh said.
How many jobs do data centers create?
Mayors across the country told Straight Arrow they either could not provide specific job figures or agreed that the number is relatively small.
In Altoona, the Meta facility has created 400 support roles, according to Meta’s website. In De Soto, Kansas, a 7,000-person town outside Kansas City, Mayor Rick Walker told Straight Arrow data centers are expected to bring 150 to 200 jobs.
Larger-scale research on job creation has yielded a range of results.
On the higher end, a study sponsored by the industry group Data Center Coalition found that data centers directly employed just over 1 million people in 2024. However, the report does not differentiate between construction jobs and permanent operational roles. The study found another 4.5 million “indirect” jobs as a result of data center development.
The Brookings Institution looked at the long-term impact of data centers on local job figures in a May report.
“Data centers do create local jobs, though fewer than industry advocates claim,” the Brookings report said. “Naive estimates that fail to account for preexisting growth trends overstate the effect by a factor of three.”
Brookings measured total private employment, which would include both direct and indirect data center jobs, finding that six years after major data centers were built, their home counties had added 2,000 to 4,000 jobs.
A 2025 Business Insider investigation found the largest data centers across the country may employ up to 150 people, while others employ only 20 to 40 full-time workers.
Why would revenue be more attractive than jobs?
In De Soto, Kansas, new data centers are not expected to provide a surge in jobs. For Walker, that’s part of the appeal.
Long home to an army munitions plant, De Soto’s employment ebbed and flowed through the Korea and Vietnam wars until the plant was shut down in the 1990s, Walker said. In 2025, Panasonic opened a battery manufacturing plant on the old munitions site, which is expected to generate 3,000 to 4,000 jobs.
The city is also in the process of approving a 600-megawatt data center by developer Beale Industries that Walker said would complement Panasonic’s battery factory. The project will create 50 permanent jobs, according to Beale Industries.
“It’s going to provide a great source of revenue without putting additional pressure on the Kansas City labor market,” Walker said.
De Soto collects a franchise fee on every kilowatt-hour of electricity sold within the city limits — that’s in addition to sales tax on electricity. Walker expects the franchise fee and sales tax combined will generate $10 million annually.
That’s more than the $8.8 million the city currently budgets to spend each year, according to Walker.
The city is offering Beale Industries a 10-year property tax abatement, but after the 10 years, Walker said the city will earn another $2 million annually.
Over 25 years, Walker predicts the city will receive $300 million as a result of this one deal.
Instead of needing to upgrade existing infrastructure and expand city services, Walker wants to build a $30 to $40 million community center, but he said, “if the data center project does not come online, that project’s not going to happen.”
Walker isn’t alone in making this case. In Altoona, O’Connor described a similar trade-off.
With a data center, “you have this big tax base with really very little strain on your services” like police and fire, O’Connor said.
And mayors are hopeful that data center revenue can help stave off increases to property taxes. Singh, in Connecticut, said data centers “support public services, schools, roads and public safety without placing an additional burden on homeowners who already pay high taxes.”
Municipalities can also negotiate specific community benefits. In Altoona, Meta invested $11 million in water infrastructure; De Soto is seeking a similar, $10 million water infrastructure pledge from Beale Industries.
Are tax breaks worth it?
To attract data center developers, states, counties and municipalities often turn to tax breaks on equipment or property taxes.
As opposition to data centers grows, tax breaks and abatements are becoming increasingly heated political issues, with several states eliminating tax breaks in recent months after public pressure.
Ohio’s recently paused policy cost the state $1.6 billion in forgone sales tax revenue in 2025. In Texas’ 2028-29 biennial budget, the state expects to lose out on $3.3 billion from its sales tax exemption for data center equipment, according to the Texas Senate Finance Committee.
At a local level, property tax abatements are seen as a way for municipalities to ensure tech firms pick their community over other parts of the country.
Nathan Jensen, a professor of government at the University of Texas at Austin has studied tax policy as a means of economic development. He told Straight Arrow that since tax revenue is the primary benefit data centers offer, tax abatements are “undercutting exactly what you’re trying to maximize.”
Jensen is doubtful that abatements are necessary to attract data center projects backed by multi-billion dollar tech companies.
“It’s a great way for politicians to take credit for projects in their community,” which research shows resonates with voters, according to Jensen.
But the tech industry has the upper hand in negotiations because “the companies actually know what other offers they have, and the companies know what locations are best for them,” Jensen said.“It is playing a game of poker where the other side sees your hand.”
Back in Altoona, Meta is 13 years into a 20-year tax abatement. O’Connor said he has no regrets about how the project panned out, and now — even though the facilities are increasingly unpopular across the country — he wants even more data centers.
“I keep telling Meta,” he said, “Why do you guys go bang your head against the wall everywhere else when you can just build more here?”
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