Texas Voters Turn Against Data Centers, Reshaping Governor and Senate Races

Texas is home to the fastest data center growth anywhere in the world, and with the midterm elections approaching, opposition to the industry has become a defining political issue in the state. An August poll found that 57 percent of Texans oppose building data centers, including 43 percent of Republicans, 75 percent of Democrats and 54 percent of independents.

Gary Bledsoe, president of the Texas NAACP, says the fight "is the issue in Texas." He points to disputes around Austin: a proposed data center on land meant to be a park in Taylor, recall attempts against the mayor and City Council members in Temple, and San Marcos, which became the first Texas city to ban data centers. The NAACP has joined dozens of groups to form a coalition called We the People Texas, which Bledsoe estimates represents as many as 1 million voters. Its members raise concerns about water use, tax subsidies, and the gas plants and wind farms built to meet rising electricity demand.

Jet Parker cofounded Save Rural Texas, now part of the coalition, after residents of the Texoma area near Oklahoma successfully delayed a local data center project. She says the issue unites people who otherwise agree on little, and she warns that Republicans who keep backing data centers will lose Texas.

The state has long courted the industry. A 2013 sales and use tax exemption passed under then-Gov. Rick Perry, and Gov. Greg Abbott expanded it in 2015 to cover hyperscale facilities. Qualifying developers can avoid state taxes on equipment and electricity for up to 20 years. The break was first projected to cost $14.6 million across 2014 and 2015, but state officials estimated in 2025 that it would mean $3.2 billion in lost sales tax revenue over two years.

Other pressures are mounting. Electricity bills have risen 35.4 percent on average over five years. The state's largest grid operator estimates data center power demand could grow nearly tenfold by 2030. The Houston Advanced Research Center says data centers used about 25 billion gallons of water last year, roughly 0.4 percent of the state total, and that share could reach 2.7 percent by 2030. Texas also leads Virginia in data center capacity, with 26GW of existing and under-construction capacity against 13GW.

Abbott, once proud to call Texas the "epicenter of AI development," has shifted course. In June he directed the Public Utility Commission to make data center operators cover the cost of infrastructure built to serve them, and he later announced statewide permit moratoriums pending audits of electricity and water use. He has also said he would support repealing the sales tax exemption. Critics are unconvinced. The NAACP says the audits cover only projects connected to the grid, while many Texas data centers generate their own power. An October investigation by Public Citizen and FracTracker found records suggesting agencies were still processing permits, which Abbott's office denies. Bledsoe calls the pause "an attempt to run out the clock before the election." Abbott's campaign says its standards require data centers to pay for their own electric infrastructure and reuse their own water, among other conditions.

Democrat Gina Hinojosa, Abbott's main challenger, has taken a narrow lead in some polls after calling for a moratorium until the legislature passes more protections. Anthony Elmo of Good Jobs First says her stance has won ground in moderate Republican communities. Miriam Cobb, cofounder of the Texas Coalition Against Data Centers, doubts her sincerity, noting that the International Brotherhood of Electrical Workers, a major donor, recently formed an alliance with OpenAI and data center developers. Cobb plans to write in an independent candidate.

In the Senate race, Republican Attorney General Ken Paxton, who voted for the tax exemptions as a state senator in 2013, now says he would support repeal. He has opened investigations into data center water use and the Taylor parkland case, though he reportedly received hundreds of thousands of dollars from data center interests this year. Democrat James Talarico promises to stop data centers from raising utility bills and to let local communities decide whether to host one. Advocates say the polarized race is unlikely to turn on this issue alone. The Data Center Coalition, a trade group of major tech companies, endorses no candidates and says its members want to be good neighbors in Texas communities.