Google Wants $15M in Tax Breaks to Build a Data Center in Minnesota

> As jobs appear and wages go up those people spend a great deal of their money in the area

fifty datacenter jobs? These are probably not the folks raking in the big comp and RSUs.

...it's a race to the bottom, legislators see a simple equation that converts public money into tallies in their win column, to be used while jockeying for more power or re-election.

I don’t think anyone is arguing for no regulation. I am supporting competition within a regulatory framework. Constitutional, consumer, environmental, and other similar protections are all critical. It’s a reality that there remain very different philosophies regarding local governance — taxation, public services, public-private partnerships, etc. and some appropriate level of competition seems to be the best way to test competing approaches and compare outcomes.

@kartan, there is a lot of valid reasons to give an incentive such as a tax break to a large company, I will list a few:

1. Brand name corporation in your community, leading to new businesses propping up

2. Increase land-value in the area, leading to higher city taxes

3. Income, corporate and other taxes associated with the company's project & continuous operation

4. Long-term certainty. Most companies wont build a data center only to scrap the project in 2 years.

5. Economic multiplier. If we assume that each job is tied to $100,000 in income, taxes, benefits, etc and there are 2,300 jobs for 24months, we are looking at $345M-460M in 2 years. Run an economic multiplier and you may be reaching the billion mark

6. Plenty of city,state,federal projects run at a negative or neutral economic value. Having a business such as Google offering to bring business to your hometown will certainly make you listen to them and consider their offer.

It becomes a matter of cost/benefit analysis and ensuring that the community accepting this transaction understands and has the option to complain about it.

I agree that if everyone plays this game, we may reach a point where governments are fully subsidizing every business (there are already plenty of businesses subsidized by governments). It is a matter of finding the right balance.

Just for comparison, there's a data center in Lenoir, NC (nearest thing to a "tech hub" would be considered Charlotte, NC about 1-to-1.5 hours away).

The report [1] claims: "In its analysis for Google, Oxford Economics shows the data center in North Carolina’s Caldwell County is responsible for 1,024 jobs. The total includes 250 jobs directly attributable to Google activity, indirect jobs in the data center’s supply chain, and induced jobs (those generated by the “multiplier effect” of spending by Google and its vendors in the community). ... Google has invested $1.2 billion in the data center in Lenoir, and its 250 direct jobs generate a combined recurring income of approximately $22.5 million, the report says." (And I assume the "recurring income" is (OLD: tax-revenue-to-government-entities) actual income for workers, about $90K average.)

[1] "Report Examines Economic Impact of Google Data Centers in N.C. and Across U.S." -- https://edpnc.com/report-examines-economic-impact-google-dat...

( My father-in-law worked 40 years ago at this campus location (around when my wife was born) when it was part of the furniture industry. He himself fared well enough in the that industry in various companies/locations till he retired about 5 years ago, working in HR. While the furniture design-side still lives on, especially around High Point, NC, much manufacturing has moved overseas. )

EDIT: I revised, now I think the "recurring income" is for workers, not government entities ... also, added father-in-law's connection

I read some oregon or washington rural county threw incentives at a data center.

It ended up being so automated it employed 6 people total. Maybe in 100 years they would recoup the incentives.

... edit: but I can't find the original story. I did see ones where the automated centers still produce a lot of property tax revenue but the lack of jobs is good because it doesn't further load municipal resources...

I guess it comes down to smart accounting.