Whenever people talk about the artificial intelligence boom, they mention the cloud. But the cloud actually lives on the ground. It lives in massive, power-hungry data centers that cost a fortune to run. Between the strain on local grids and city budgets scrambling to build new infrastructure, you're the one paying the price.
Why your power bill is funding the AI boom
Tech companies are building digital infrastructure at a staggering pace. Keeping all those servers cool requires an ocean of electricity, and it takes a heavy toll on local grids. In New York, Governor Kathy Hochul is pausing permits for hyperscale data centers that use 50 or more megawatts of power for one year. The state just needs to catch its breath, Realtor.com reports.
Where the building continues, residents are footing the bill for grid upgrades. In Northern Virginia’s famous data center corridor, electricity bills could rise by more than 25% due to infrastructure costs.
The squeeze is already happening in Pennsylvania. Households there have seen steep electricity bill increases over the last year and a half, according to CBS News.
The local tax trap
You might assume these massive tech facilities bring in enough tax revenue to offset the burden. In some places, they do. In Loudoun County, Virginia, data centers generate approximately $1.3 billion in annual tax revenue.
But everywhere else, municipal budgets are tightening. Local governments are passing their operating costs directly to you.
Down in Texas, Austin City Manager T.C. Broadnax recently proposed a $6.6 billion budget. It leans heavily on residential property owners to make the math work, as detailed by the Austin American-Statesman.
We're seeing similar moves elsewhere. The Asheville City Council just hiked its property tax rate to maintain revenue levels. Cities are scrambling to fund water and power expansion. Your property tax bill is the easiest lever they can pull.
What's happening in your state
In Georgia, the physical footprint of tech expansion is hitting close to home. Meta’s data center in Newton County uses about 500,000 gallons of water a day. Some nearby residents are paying out of pocket to repair appliances ruined by brown sediment they blame on the heavy local construction.
Meanwhile, Colorado is trying to help homeowners soften the blow of rising energy costs. Power Ahead Colorado is offering a new $1,500 rebate for installing energy-saving, cold-climate heat pumps.
The bottom line for you
- If your local government is raising rates to cover budget shortfalls, make sure you aren't overpaying on the baseline. Check our Property Taxes & Home Finances guide to see if you have grounds for an appeal.
- With local grids under pressure from new data centers, you might want to look into home efficiency upgrades. Our Electrical guide covers the best ways to audit your home's energy draw and keep your usage low.
- Before new tax rates lock in for the year, verify that your municipality has your primary residence status on file. Our Homestead Exemption guide explains how this simple filing shields a chunk of your home's value from the tax man.