Data Center Bill Would Divert Local Tax Revenue to the State
The legislation would pave the way for a controversial new facility near Davis and Thomas
A bill advancing in the state legislature would divert millions of dollars in property taxes from local schools and Tucker County government to the state of West Virginia if a proposed data center near Davis is built, according to a new analysis.
The bill has drawn the ire of local elected officials who complain about the diverted tax revenue, as well as sweeping provisions that would block local control over data centers.
“If the money is made in our county, the money should stay in our county,” Tucker County Commissioner Fred Davis said. “If they take the money, that ends up hurting our schools. The money should not go to the state of West Virginia.”
Davis Mayor Al Tomson called the bill “Charleston’s significant overreach of governmental authority.”
“The proposed legislation reallocates all appreciated property tax revenue from these developments to the state, effectively diverting critical funding away from local governments and school districts,” Tomson said.
He also noted the bill “strips counties and municipalities of all local control over the planning and construction of power plants and data centers.”
County Commission President Mike Rosenau said that while he’s happy about the prospect of new jobs, he opposes the diversion of local property taxes to the state.
“I don’t understand that,” Rosenau said. “I’m not in favor of that.”
Rosenau also said he’s concerned about the loss of local control over the facility, and he wants more details about how many permanent jobs it would create.
The town of Davis will host an informational session on the proposed data center at 2 p.m. Sunday at the Davis fire hall.
The bill in question, HB 2014, would facilitate the construction of data centers around the state by repealing environmental restrictions and blocking regulation by local governments. The West Virginia House of Delegates recently passed the bill and action in the Senate Economic Development Committee is expected today, according to the West Virginia Weakly.
The bill faces a Saturday deadline, when the state’s legislative session ends.
John Paul Hott, a Republican who represents Tucker County in the West Virginia House of Delegates and voted for the bill, and Republican Senate President Randy Smith, who also represents Tucker County in the West Virginia statehouse, did not return calls and emails seeking comment for this story.
Country Roads News last week reported on plans by a secretive Virginia company to build a large off-the-grid power plant between Davis and Thomas for what appears to be a data center. The power plant would run on natural gas, with 30 million gallons of diesel fuel stored on-site as a backup fuel source.
The town of Davis will host an informational session on the proposed data center at 2 p.m. Sunday at the Davis fire hall.
Legislation Details
Environmental and other advocacy groups, including the West Virginia Highlands Conservancy, have sounded alarms about the proposed Tucker County data center and the legislation that would enable it.
According to an analysis of the bill by the West Virginia Center on Budget and Policy:
Any new property tax revenue generated by the development of a data center would go to the state for a new “Personal Income Tax Reduction Fund,” an “Electric Grid Stabilization and Security Fund,” a state economic development fund, and other state funding pools.
Local counties, towns, cities and school districts would continue to receive the share of property tax revenue generated by the property before any improvements.
The analysis includes an estimate of the tax impact of the proposed Tucker County data center. The analysis, which notes that there is little information publicly available about the project, forecasts that the legislation would divert $7.8 million in property taxes annually from local governments to the state.
Of that $7.8 million, $3.1 million would be property taxes that would otherwise go to Tucker County and $4.7 million would be property taxes that would otherwise go to the local school district.
The county and the school district would retain only about $15,500 in property tax revenue from the facility, the analysis states.
Gov. Patrick Morrisey said the data center bill would “fuel the elimination of our state income tax.”
The West Virginia Center on Budget and Policy is a left-leaning nonprofit research and advocacy organization that seeks “to advance public policies that increase opportunity and eliminate inequities.”
However, West Virginia Gov. Patrick Morrisey, a big booster of attracting data centers to the state, has acknowledged and boasted of the diversion of local tax revenue to bolster the state budget. He stated that the data center legislation “reapportions tax revenue to reinvest in West Virginia,” and noted on X, formerly Twitter, that revenue generated by the bill would allow state lawmakers to “wipe out our state income tax.”
Mat Cloak contributed to this story.
Curious why you would use generative AI to create a photo for inclusion in this coverage? Very likely that is the impetus of this build-out while the microgrid bill explicitly cites the need to sustain AI. Found it odd, considering the implications within this same story of such technology's immense environmental resource drain and the shady & disenfranchising industry practices related to the rush to support genAI. Wondering if this localized issue creates any dissonance for you or others around using genAI platforms.
Plenty of questions to be answered by 1) the owners of the property & 2) the politicians who crafted the legislation. Neither of these parties appear to have had much interest in informing or enlightening the local residents about the scope & impact of the project. That naturally leads to suspicion that there are issues that they preferred to hide. Not a good start. If the project truly offers benefits to residents, tax payers & job seekers, then let's have a comprehensive open conversation... before the enabling legislation is rammed through prematurely.