GOP rep: Time will tell on data center tax credit pause

By Jim Talamonti | The Center Square
The Center Square

(The Center Square) – After Gov. J.B. Pritzker announced that his administration would pause data center tax credits, a Republican legislator said time will tell if investment is discouraged because of it.

The governor announced on Friday that he would direct the Illinois Department of Commerce and Economic Opportunity to pause data center tax credits, starting July 1.

A data center advocate said the pause would further discourage investment at a time when the industry is facing regulatory challenges and uncertainty in Illinois.

“Not only will pausing the program significantly curtail investment moving forward, but it will also remove a critical labor protection for Illinois’ skilled trades while not saving the state any money, according to DCEO,” Data Center Coalition State Policy Director Brad Tietz said in a statement.

State Rep. Amy Elik, R-Alton, said it’s hard to tell if project development would stop.

“Time will tell if this is truly going to discourage investment. I think that obviously these were very generous tax credits that were driving development,” Elik told The Center Square.

The governor also outlined his regulatory proposals and called on lawmakers and others to work on data center policy during fall veto session.

Elik said the legislature and the governor’s office could provide the certainty the industry is looking for.

“I think we have to have the local communities in mind first, but that also includes certainty that the data centers are going to bring their own power and they’re going to manage their water so that those things are not thrust upon the community for higher energy rates and water rates,” Elik said.

The Illinois Manufacturers’ Association expressed opposition to the tax credit pause, saying it threatens ongoing investment.

“We’re also concerned about any policy framework that would inadvertently harm large manufacturers that use large amounts of energy and water to produce the goods that are a part of our everyday lives and help drive our economy,” IMA president and CEO Mark Denzler said in a statement.

The governor’s office said existing incentive agreements under the Data Center Investment Program, including those entered into with DCEO before July 1, 2026, will be honored.

It is unclear if pausing the tax credits would impact the proposed $20 billion Joliet Technology Center, another planned development in DeKalb and other projects around the state.

“We’re still reviewing the details of the framework and any potential implications for local projects,” the city of Joliet said in a statement to The Center Square.

Elik said it’s uncertain how many jobs are created by data centers once construction is finished.

“What is the long-term job effect? I think that’s really the question about the tax credit benefits for people is how many jobs are you truly creating that are long-term?” Elik said.

The governor’s move to pause the tax credits followed The Center Square’s report on Thursday, detailing the state legislature’s decision to not advance data center regulation during the spring session that ended on Monday morning.

In his Friday statement, Pritzker called on the legislature to advance his proposed reforms during fall veto session.

The Illinois Senate has scheduled session days Nov. 17-19 and Dec. 1-3. As of Friday, the House had not announced its fall schedule.

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