The state House adopted a bill Wednesday to offer a big tax break to lure data centers to Michigan.
Data centers are large warehouses that store computers, servers, storage systems, and other hardware. Economic development officials and Governor Gretchen Whitmer’s administration believe the “server farms” will help advance artificial intelligence infrastructure as an attraction to businesses and factories
The legislation was a tough sell as it took a combination of Democrats and Republicans to reach the exact number of votes needed to adopt the bill. A second bill in the package stalled but could be revisited in the future.
Representative Bill Schuette (R-Midland) was a yes vote.
“Data is going to be a huge resource fueling part of the 21st-century economy, so I want those investments to happen in Michigan,” he said. “And that’s why I’m in favor of also lowering taxes to spur investment.”
But Republicans and Democrats who voted “no” were concerned the legislation would shift a large tax burden to small businesses and private citizens.
“We also have to protect the residential and commercial ratepayers,” said Rep. Jenn Hill (D-Marquette). “In the Upper Peninsula, we have the lowest industrial rates and the highest residential rates in the entire state and the Midwest. I think they need to be paying their fair share.”
Some Democrats were also concerned that the huge electricity demands of data centers would stall progress toward meeting renewable energy targets. The state is supposed to complete a transition to generating electricity without contributing to greenhouse gas emissions by 2040.
