Now that Georgia’s 2024 legislative session has adjourned, the state is faced with an important decision affecting the future of its jobs, small businesses and leadership in the 21st-century economy. Gov. Brian Kemp will have an opportunity to reject H.B. 1192 – legislation that, if it becomes law, runs contrary to the state’s well-earned pro-business reputation and puts at risk thousands of high-quality Georgia jobs that support the state’s data center industry and many other future-leaning business sectors.
Georgia has become a national leader in attracting data center investment and deploying the digital infrastructure that powers our innovation economy -- including the digital services, apps and devices we all rely on in our daily lives to live, work, learn and much more. The development of this industry has led to significant investment, job growth and direct economic impact within the state. Data centers involve huge financial investments in buildings and equipment, with some individual projects exceeding $1 billion in capital investment – investment, revenue and wages that flow to Georgia businesses and workers each time a new data center is built.
Credit: handout
Credit: handout
In a 12-month period spanning 2020-21, data centers provided $5.3 billion in total economic impact within the state, and Georgia’s data center industry has grown significantly since then. A University of Georgia audit showed more than nine jobs are created for each $1 million in data center construction output, and more than four indirect jobs are created for every job inside a data center. In total, Georgia’s data center industry provided 22,760 total jobs statewide in 2021, according to a PricewaterhouseCoopers report.
By prioritizing investments in local Georgia communities, data centers also catalyze supply chain and service ecosystems, creating jobs for thousands of construction professionals as facilities are built, and providing quality, high-wage jobs to support ongoing operations. Every data center comes with years of reliable support for local economies by promoting job creation at restaurants, hotels, rental car agencies, fiber and HVAC installers, and many other small businesses.
Thanks to data centers, Georgia businesses operating in construction, general contracting and the skilled trades are booming, including general contracting companies, electrical contractors, surveyors, equipment maintenance vendors and heavy equipment rental companies.
Georgia’s success didn’t happen by accident; substantial credit goes to the foresight shown by Georgia leaders in recruiting the data center industry to the state. In 2018, Georgia established its High-Tech Data Center Equipment Incentive Program, a tax exemption program for qualifying data center equipment purchases. Two years ago, Georgia extended the length of the program through 2031. This led to significant additional investment, new data center companies investing and hiring in the state, and the emergence of Georgia as the sixth-largest data center market in the country.
The incentive program has been a significant success. The University of Georgia concluded that the state accrues approximately $10.50 in economic value for every dollar the incentive costs and estimated that 90 percent of Georgia’s data center investments would not have occurred in the state absent the incentive.
Unfortunately, HB 1192 would abruptly suspend the state’s incentive program this year. If it takes effect, it would create tremendous uncertainty around many data center projects planned and actively under development across the state. Though legislative leaders attempted to advance language separately to ensure that tenants could still access the exemption during the suspension period, that language did not advance prior to adjournment. This impairs the ability of multi-tenant data centers to attract business tenants to their facilities. It also risks driving data center jobs and digital infrastructure investment to more than 25 other states that continue to offer similar economic development programs.
More broadly, the legislation injects uncertainty around the state’s long-term commitment to its economic development programs. Suspending this program would send the wrong message to all capital-intensive businesses for which certainty and predictability are essential. It also would run contrary to Georgia’s reputation as a top state to do business. That’s why the Georgia Chamber of Commerce, Associated Builders and Contractors, Associated General Contractors, and dozens of Georgia businesses oppose the bill.
By rejecting HB 1192, Gov. Kemp can maintain and grow thousands of high-paying jobs, support future economic opportunities in this essential, high-tech industry, and keep Georgia the No. 1 state to do business. We urge the governor to veto this legislation.
Josh Levi is the president of Data Center Coalition, the national trade association for the data center industry.
