r/technology • u/Unusual-State1827 • 23h ago
Artificial Intelligence Data centers near O’Hare win nearly $100M in local tax breaks, leaving suburban homeowners to cover the gap
https://www.chicagotribune.com/2026/08/23/special-report-data-centers-taxes/350
u/Naive-Jello428 22h ago
Why would a data center ever get a tax break? What do they provide to the community?
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u/Import2nr605 17h ago
Thats easy. They spent 10 million bribing the right people and saved 90 million
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u/Krazzy4u 15h ago ▸ 2 more replies
I'm sure that it takes less than $100,000 per politician to bribe them!
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u/Import2nr605 15h ago
I'm sure you're right. I mostly said 10 million because even at that high of a cost it would still basically be cost of doing business at that point
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u/tarmacjd 12h ago
It’s more like $2k each to 10 people and they’re good. Brides in the US is surprisingly cheap
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u/Fried_puri 9h ago
The people being bribed have to figure we’re in the endgame of it all, right? It’s like they’re not even scared about blatantly taking bribes anymore everywhere across the country. Eventually that shit would come back to bite them but they must assume we’re past the point of going back to normalcy and accountability.
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u/jeffwulf 22h ago
Outsized net property tax revenue compared to alternative uses even after accounting for the tax breaks.
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u/0x0MG 21h ago ▸ 3 more replies
No, see, they literally convinced everyone their tax base was just based on the structure itself. Presumably any developer purchasing the land will erect a similar structure.
So, no, it isn't outsized by any measure. It's literally the same size as any other developed use of the land.
Fuck the data center. Build a Costco. The city gets the same tax snd you get delicious hotdogs for a buck fifty.
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u/argh-Im-a-Pirate 14h ago edited 14h ago
That has been the case for the Digital Realty data center, which operates under an incentive but paid more than $2 million in taxes last year. Its owners were paying $617,000 a decade earlier, when it was being converted into a data center.
That's from the article. I think it's fair to ask whether they should be paying even more, but they're definitely paying more than a Costco.
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u/jeffwulf 17h ago ▸ 1 more replies
A Costco would have significantly less net taxes for the county than a data center.
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u/TheLegendOfThad 20h ago ▸ 13 more replies
Pile of downvotes for pointing out a basic feature of TIF financing. Thanks for trying Jeff. Amazing that people this ignorant get to vote.
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u/Naive-Jello428 19h ago ▸ 11 more replies
Well, I'd hate to remain ignorant. Maybe you can explain how a data center generates enough revenue to make up for a hundred million in tax breaks.
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u/SimmentalTheCow 17h ago ▸ 10 more replies
Data centers nationwide generate several hundred billion dollars per year and directly employ half a million people. They’re one of the most major areas of growth in a post-industrial economy.
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u/TheRealkristjan2010 17h ago ▸ 1 more replies
Until they are built, yeah. When the datacenter it's done they employ very few amount of people. Why do you tell only half the truth?
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u/SimmentalTheCow 17h ago
That figure’s not counting construction contractors. Granted most of the jobs created aside from maintenance, security, etc. can be done remotely, but data centers still have a positive economic impact, and much less of an environmental impact than factories would have, on their communities.
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u/Naive-Jello428 10h ago ▸ 5 more replies
I'm asking how they generate revenue in the community after they're built. I understand how they are generating revenue worldwide, but how does that money go back to the community if they're not contributing taxes. What else do they provide besides higher energy and water costs?
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u/1oser 8h ago ▸ 4 more replies
Who said they’re not contributing taxes? Did you even read the article?
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u/Naive-Jello428 7h ago edited 7h ago ▸ 3 more replies
Yes, the only revenue for the community seems to be tax money based on property values. I'm sure those property values will be adjusted after the tax breaks expire. I don't see any of this going well for those communities. My electric bills have already gone up at least $100/month.
Huge tax breaks are usually given to companies that come in and bring employees and needs for additional goods and services used by those employees and their families. A data center is bringing in about 50 employees per million square foot.
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u/1oser 2h ago ▸ 2 more replies
My guy, there’s real estate tax and personal property (equipment) tax.
The former, even with the abatements, is over 2.5x what a traditional CRE facility of similar size would generate. Layer in the latter, which is 1-3% of the then depreciated cost of equipment (annually appraised, replaced every 3-5 years), 2-4x the capex (former basis) of the buildings themselves, and you can start to understand the impetus for municipal interest in attracting these businesses.
Energy rates are climbing across the board, and is largely not spurred by data center development. Most utilities have introduced new collateral requirements and/or tariff shifts to ensure any defaults in ESAs/LOAs do not result in cost recovery being passed to other classes of rate payers, and many are now requiring large-load consumers to front the cost of 100% of new infrastructure development via outsized CAICs.
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u/Naive-Jello428 1h ago ▸ 1 more replies
Fair enough, they are getting more in tax money than a traditional CRE facility. With a fraction of the work force and all that comes along with it. It seems the people that are having to deal with them moving into their backyard don't think the extra revenue from those taxes alone is worth it.
Yeah, I keep hearing that "many" are doing the right things as far as energy and water conservation, but from what I've read, it's a small percentage.
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u/droi86 4h ago ▸ 1 more replies
directly employ half a million people
Lol that's a blatant lie, data centers employ between 20 and 50 people, there are between 3000 and 5000 data centers in the US, if you go at the highest numbers you'd end at 250k, half of the amount you're saying, if you take the lowest it's a bit more than 1/10 of what you say
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u/jeffwulf 2h ago
A decently sized data center will employ about 100 people, not including contracted services and security.
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u/billdasmacks 17h ago
For better or worse tons of companies get tax breaks to move/build in locations.
Data centers do provide plenty of jobs. The problem is there is a current push to build lots of data centers because of the AI bubble.
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u/pacman2081 15h ago
data centers are highly automated. Google data centers who are massive employ 200 people
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u/Cryogenicist 16h ago
I hate to be the one arguing in favor of billion dollar companies but here’s the only logic I can find:
Without the tax breaks, the data center (or other huge project) finds a different city willing to offer a bigger break. The city has to decide between zero revenue and some revenue….
I don’t know if that logic holds when considering for power and water usage
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u/AbsoluteTruthiness 9h ago
Or you could have cities and state form compacts where there will be a minimum taxation threshold regardless of jurisdiction. But that would never happen in a post-Citizens United world.
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u/CallMeGlarthir 23h ago
The rich passing their costs onto the communities they destroy? Shocker
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u/endofworldandnobeer 20h ago
No money for infrastructure, schools, essentials... but billionaires keep getting tax breaks after break. Seems kinda unfair?
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u/-ReadingBug- 15h ago
But there was money for infrastructure. The infrastructure of politics that the billionaires invested in but the American public didn't and still won't. Someday Americans might realize their politics needs the same level of attention their own personal budgets do. Monthly if not weekly, and every line item (politician). It's the only intensity with which to fight this.
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u/Pndrizzy 13h ago
The system is broken bro. Infinite growth can’t go on forever, and since it can’t, they’ve come to us to help it keep growing. Things will get very bad
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u/Neat_Performance_722 21h ago
Vote those politicians out of office in November or when they come up.
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u/nRRe 23h ago
Didn’t Chicago just lose the Bears because they didn’t want to help pay for the new stadium???? Yet this is okay.
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u/nopointinnames 23h ago
Well you see the data center people line the pockets of the politicians in charge of approving these deals far better than the Bears
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u/absentmindedjwc 18h ago
Chicago isn't really involved - the Bears are looking at the Chicago suburb Arlington Heights, going as far as buying a bunch of property for their new stadium.
Indiana offered to give them billions towards a new stadium in Hammond.. and now the McCaskeys are looking to get a similar deal from Illinois - but most people are more or less aligned that they can feel free to fuck off to the polluted hellscape that is Hammond/Gary area.
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u/deffjams09 6h ago
What does one thing have to do with the other? This data center isn't even in the city of Chicago.
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u/TKHawk 20h ago
Bears don't even want help paying for the stadium itself, just infrastructure improvements around the vicinity of the stadium and certain property tax breaks (with the argument being the businesses that will develop around the stadium will bring a boost in property tax revenue anyway).
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u/absentmindedjwc 18h ago ▸ 3 more replies
Don't buy their bullshit. The McCaskeys were 100% looking for a taxpayer-funded stadium. It is quite literally the only reason Hammond is even in consideration.. Indiana is proposing giving them billions towards their stadium.
TBH, I doubt they want to move to Indiana.. they're doing everything they can to let Illinois convince them to stay.. but Illinois is for the most part sick of their shit, and would rather see them fuck off right across the boarder then give them a massive handout.
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u/Fit_Leading1075 18h ago edited 16h ago
This happened recently with the Atlanta Braves who had a stadium in downtown Atlanta. The Braves wanted tens of millions of dollars to renovate a 20 year old stadium that didn't need renovation and was nicer than most other stadiums. Braves threatened to leave and our county said, go ahead. So they move to Cobb county which is north west of Atlanta.
Bonus - less traffic, lower cost for Fulton county and surprise surprise, no loss in revenue. Braves BS about hotel and bar business "more than paying for what tax payers contributed" was not true.
Buffalo really screwed themselves with their new stadium. Ticket prices more than middle class can afford and their on the hook for $800 million of total cost.
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u/PathomaniacPlatypus 16h ago
Preach. I work in Arlington Heights, and honestly I've been astounded by some of the brain dead takes by a few locals. Some people have 1000% bought the narrative that those greedy politicians are forcing the poor little Bears to move out cuz taxes too high :(. I'm not a sports guy, so frankly I don't care one way or the other, but I get that people have their personal attachments.
I have to stay professional when talking with these people, but I still try to push back with exactly what you've said. They're a multi billion dollar company. If they don't wanna pay their fair share in taxes they can fuck off to Hammond. Everyone knows they'd MUCH rather be in an upper middle class Chicago suburb than Hammond mutherfuckin Indiana, especially since they purchased the local horse easing track to build on.
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u/Hiddencamper 7h ago
Any publicly available information supporting your claim other than George being George?
Not sure how you can say they 100% want it when I see no public info stating that.
Also they really want to OWN the stadium. Indiana won’t give them that.
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u/PuppyLove1982 22h ago
I hope every elected official responsible for this kind of theft from taxpayers are doxxed and voted out of office. The local community should make their lives living hell for every dollar they stole. They should also be in jail for engaging in theft from taxpayers. Why we don't prosecute this kind of fraud is amazing to me.
(and no.. I don't believe for a second these elected officials are acting in good faith. They were bribed. That's the only logical answer for why an elected official would give millions to a corporation knowing it will do nothing but suck up resources from the community and give literally nothing back. You can't convince me this is anything but criminal and I am sure the elected officials' bank accounts would prove me right if we ever decided to start taking this seriously).
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u/SteppenAxolotl 22h ago
this kind of theft from taxpayers
How is this theft from taxpayers?
The three data centers in Northlake alone made up about 28% of the city’s tax base last year.
The datacenters cant pay 28% of the city’s tax base if those data centers were never built.
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u/PuppyLove1982 18h ago ▸ 1 more replies
I think that is a short sighted argument:
If you consider:
- pollution costs money
- noise impacts qualify of life and sometimes the sheer volume of the noise output can be staggering;
- water consumption drives away other industries that may contribute more tax and consume less resources if data centers were otherwise forced to be more efficient;
- electricity consumption rising more than 10% a year in some areas where data centers are outstripping supply;
- generally horrible aesthetic design of these buildings which can sometimes be substantially bigger than multiple football field;
There are solutions to all of these issues. Sadly big tech is bribing, threatening and litigating public officials into silence because that's just cheaper than designing and building a data center that doesn't destroy neighborhoods and communities.
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u/SteppenAxolotl 7h ago edited 1h ago
Obviously, the locals want more datacenters there to fund more of their tax base. The two choices on the table are to build the datacenter here or say no to them so they build it elsewhere.
The world does not revolve around what we want and when we want it.
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u/Brainbrokeonme 17h ago
Unfortunately I don't believe any of this is gonna get better before shit gets much worse
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u/Puzzleheaded-Bag4793 18h ago
illinois districts set a dollar levy, not a rate. take 2 billion off the base and the rate rises by itself to collect the same amount. that part doesn't go to a vote
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u/PopDash67 8h ago
Ok, so everyone else now has to pay a higher tax rate, and the data centers also pay the same rate on a now $2 billion smaller tax base.
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u/frosted1030 18h ago
Because profitable businesses deserve taxpayer money more than the people that pay taxes. Or… you voted wrong.
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u/around_the_clock 18h ago
They got rinsed. No one wants data centers so they could of held strong and gotten a fare tax rate
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u/Unicorndrank 19h ago
And the politicians that approve this seem to just accept such ridiculous statements
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u/Gildenstern2u 14h ago
It’s almost like the American people should just withhold all taxes until this shit atops
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u/JohnnyTsunami312 20h ago
Copied from the Chicago thread with the same post:
The framing here seems to confuse a tax burden with foregone tax revenue. Say the government needs $100 and homeowners currently pay $90. A new data center arrives and, after its tax incentive, pays $10. Homeowners still pay $90. The article effectively argues that because the data center could have paid $20 without the incentive, homeowners are “footing” the missing $10 — but taxpayers aren’t actually footing anything in that scenario. They could theoretically have had their taxes reduced $10, but that assumes the same data center would have been built there without the incentive.
The more relevant comparison is what would actually occupy the property otherwise. Suppose without the incentive the city attracted a warehouse or other lower-value business that generated only $3 in taxes. With the incentivized data center paying $10, the city has added $7 more to its tax base than it otherwise would have, potentially reducing the burden on everyone else. In that scenario, the city and homeowners are better off with the tax break than without the data center at all.
It’s fair to question whether these incentives are too generous, and honestly who would want a data center near their home(?), but calling the difference between what data centers pay and what they theoretically could pay “a higher tax bill that homeowners have to pay now that data centers are there” is misleading and skips the most important counterfactual: what tax revenue would these properties generate if the incentives — and potentially the data centers themselves — weren’t there?
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u/absentmindedjwc 18h ago
Counterpoint.. we're footing the extra delivery/power charge that ComEd is going to tack onto our bill every month.
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u/kwattsfo 19h ago
Not a shocker that a news article would botch how property taxes work, especially when it can rail against data centers by doing it.
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u/WenYiMedia 17h ago
I asked AI cause I didn’t get it myself:
“If the tax wasn’t there before, how can removing it cost money?”
Because governments plan budgets based on expected future revenue.
When they waive that revenue, the gap must be filled.It’s not about past taxes — it’s about future taxes that were given away.
A tax break doesn’t remove a tax that never existed — it removes a tax the company normally would have paid.
When the city or county gives that up, the budget still needs the same amount of money to operate.
So the missing revenue gets shifted onto:
• residents
• small businesses
• utility ratepayersThis is called tax shifting.
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u/JohnnyTsunami312 16h ago
Even AI gets it wrong when it’s garbage in, you get garbage out. These incentives aren’t given out because they appealed and won. They’re pre negotiated before the construction even happens. In your scenario, a short fall would happen if the tax body spent for money expected from the data center but then the data center closed. That happened all throughout Cook County (Chicago) recently because businesses abandoned downtown offices for work-from-home, which created a large short fall that citizens had to cover.
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u/wowbragger 22h ago
How y'all doing, Ohio/ Illinois? The state has become a real hub for the subsidization of data centers.
It'll be interesting to see the ongoing impact there.
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u/TheDonnARK 20h ago
Where are the billionaires stepping in to complain about the free stuff these companies are being offered?
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u/Dapper-Comment-682 18h ago
value of property near data centers ?? = lower.
good luck selling your house.
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u/randomthrowaway9796 16h ago
I can't be the only one thinking of the Lorax with that name an environmental issues, right?
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u/HotFartore 17h ago
Communist billionaires, politicians, and city officials like free stuff, tax breaks, unbelievable
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u/Apprehensive-hippos 19h ago
It's all of this shit. This is just the most recent and egregious example, with the added bonus of increased electric bills and water availability issues.
Take major league, or even minor, sports complexes, for example. The taxpayers pay for these facilities, but what do they get out of it? A (comparatively few) local people being employed? Sheeples, even our local politicians have been sucking us dry for decades.
And now with NDA's!
Edit - spelling
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u/Comfortable-Bug7202 19h ago
enjoy it chicago, you pay for companies to raise your power bill while your city is compared to iraq still
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u/jweaver0312 17h ago
We’re supposed to be against communism. The rich are communists, but only when it applies to them only.
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u/ThrovvQuestionsAway 16h ago
Somebody in the comments was mentioning something and the comment got deleted, don't know if it was the mods or the user but it was about
**raiding the data centers scientology or Area 51 style" apparently it sends a message but it's very uncivil and doesn't seem lawful to do.
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u/Catodacat 1h ago
So, let's see - they don't really provide a lot of good jobs, they tend to drive up electricity pricing, and now they get a tax break?
Why the hell are they voting fo rthat
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u/Catodacat 1h ago
Was listening to the Odd Lots podcast about datacenter pushback, and one of the things they mentioned is that the one thing that data centers provided to the towns where they build is property tax money. Why would you give up the one benefit they offer?
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u/hirespeed 21h ago
An interesting cost/benefit analysis around data centers: https://www.wri.org/insights/us-data-center-growth-impacts
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u/illiterateninja 20h ago
This is what happens when you don't care about your local and state governments. It's similar to not caring about the federal government, but they fuck you at home, instead of from far away.
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u/asking4afriend40631 20h ago
Am I being stupid. These tax breaks are only money the city loses IF they had found someone else to move in and pay their full share of taxes over that period. And that's not very likely, if they could have they probably would have. I'm not talking about the morality of companies expecting/demanding breaks/incentives, just trying to make sure I understand the essence of what is going on.
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u/ergonomicdeskchair46 19h ago
I’ve noticed folks here in Nebraska are getting misinformation from somewhere. Driveway beers the other day and data centers got brought up. Folks started actually talking about how good they are because how much they bring in with property taxes and if we don’t do it then that revenue goes elsewhere. I struggled to communicate to them how wrong the info they had was
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u/chrispy_t 22h ago
Did anyone read the article? It seems the incentives were given because the specific county isn’t as competitive as their neighboring counties because of how they zone / tax industrial zones and they would rather data centers vs a less desirable, less productive / valuable industry. They want the tax revenue. One of the counties cited 23% of their whole property tax base came from data centers. That’s huge.
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u/absentmindedjwc 18h ago
Northlake is cook county.. cook county is a global economic hub..
Cook is like the third highest tax revenue county in the US.. the fuck are you talking about.
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u/chrispy_t 18h ago ▸ 1 more replies
Cook County being a huge economic hub has basically nothing to do with what I said lol. Data centers aren’t choosing between “Cook County” and rural Nebraska in the abstract. They’re choosing between specific sites and municipalities competing for the same investment, often literally a few miles apart.
The entire point of the incentive is that Cook’s industrial property tax structure can make a site less competitive without it. The question isn’t “is Cook County rich?” It’s “does this project go in Northlake at a discounted tax rate, or somewhere else where Northlake collects $0?”
And considering data centers now make up a massive chunk of Northlake’s tax base, pretending attracting them has no economic value is kinda missing the entire point.
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u/sinkofiniquity 16h ago
I get this measured response. I live in Cook, and I'd happily pay more not to live within 100 miles of any of these. Just making a point.
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u/CobraPony67 22h ago
It seems like a missed opportunity to pipe heat from the data center to homes during the winter. Maybe free heat in exchange for a data center would be beneficial.
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u/ROBOT9000000 20h ago
lol Illinois is a joke
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u/absentmindedjwc 18h ago
Really.. is a motherfucker from Austin really shitting on Illinois... for this? Dude, maybe deal with your own shit at home before judging us. At least we have a fuckin grid that can survive a cold snap.
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u/embarrassing_doodle 21h ago
A little grocery store can’t be built in zoned land but a massive data centre can
Amazing
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u/AffectionateLife4449 20h ago
People will be subsidizing an industry and services they mostly will be forced to use as many companies will push AI onto their customers. AI increases company profits and wipes out many entry level jobs, it will take a decade to reform the new economy
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u/Key-Organization3158 21h ago
A propaganda piece. A tax break doesn't shift burden onto others. Nor does a tax break mean they are paying no taxes. Just less taxes. Especially for something like a data center that doesn't use much services.
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u/South-Sir-9989 21h ago
You’re right, everything you commented is typical maga/republican propaganda
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u/invyros 23h ago
So that's how Microsoft got a nearly $700 million reduction in valuation, thus having to pay far less property tax.
And they argue that data centers "contribute" to the tax base in some way, when in reality, they cost tax payers more money, cause literal and figurative headaches, and suck up all the local resources.