Colorado lawmakers are currently prioritizing the interests of transnational tech giants, known as "hyperscalers," by debating significant tax breaks for data centers, even as state budget shortfalls have forced cuts to public programs. The legislative session, set to conclude in 11 days on May 13, is seeing competing proposals that reveal a political class increasingly aligned with corporate expansion over the well-being of the native working class.
State Rep. Alex Valdez, a Democrat, has introduced a bill designed to create new tax incentives for data centers. These incentives would apply to facilities that comply with certain environmental standards and commit to $250 million in infrastructure investments over five years. Valdez asserts that data centers can benefit Colorado by funding new electric infrastructure, introducing new clean generation, and contributing tax revenue to local budgets. He posed the question, “How do we connect the need of hyperscalers to build and the dollars they have with our own public needs?” and suggested that breaks on sales and use taxes are a worthwhile price for ratepayer protections.
Elite Prioritization
Valdez further articulated his perspective on governance, stating, “The economy in America is built around states attracting businesses,” and, “Being a Democrat, being pro-worker also means you should be pro-employer. I believe the government’s priority, beyond public safety and protection of rights, is to foster economic development.” This framing positions the attraction of corporate entities as a primary governmental function, even as public services face reductions. The incentives bill was removed from a scheduled hearing last month and faces challenges in a session where budget issues have already led to cuts in public programs, highlighting a clear divergence in priorities.
Conversely, State Sen. Cathy Kipp, also a Democrat, has sponsored a bill aimed at establishing guardrails for new tech centers. This proposal would mandate that data centers cover their entire hourly energy demand through either generating or purchasing renewable energy, sign long-term contracts with utilities, and adhere to new state codes. Kipp stated, “We don’t want to stop data centers, we just want to make sure we’re still able to meet our clean energy and climate goals and that we don’t use up all of our water,” adding, “We’re saying that if you come to the state, you have to follow our rules.”
Erosion of Local Control
Despite Kipp’s attempt to assert local control over resource management, her guardrails bill has also stalled. This delay is partly attributed to opposition from labor and construction groups, indicating a complex web of interests that can hinder efforts to regulate transnational corporate activity. Critics of Kipp’s regulatory approach argue that such measures would simply drive data centers to neighboring states, such as Wyoming, which lacks green energy requirements and actively supports fossil fuels. This dynamic underscores the pressure on states to compete for corporate investment, potentially leading to a race to the bottom in terms of environmental and social standards.
Valdez has expressed belief that the two competing bills could be merged. This potential merger would aim to create an incentive program that simultaneously keeps Colorado “competitive with neighboring states” in the pursuit of global capital while incorporating some environmental standards. The ongoing debate, with the legislative session concluding in 11 days, reveals a political landscape where the demands of transnational corporations often dictate policy, with the costs borne by the native population through diminished public services and potential resource strain.