Data centers can deliver multi-billion-dollar investments and large numbers of jobs to Wisconsin communities. But key issues around their development remain unresolved, including how to ensure residents are spared from increases to transmission rates or property taxes.
Far from being a hub of data center construction, a new Wisconsin Policy Forum report finds Wisconsin lags states such as Virginia and Ohio in both the number and size of its data centers. Still, three major hyperscale data centers are being built in Wisconsin in recent years, with more being proposed and often facing significant opposition. A Microsoft data center is up and running in Mount Pleasant, while centers are under construction in Port Washington and Beaver Dam.
Recent technological advancements in artificial intelligence are driving a national data center boom. A broader examination of the impacts of this technology – an understandably salient issue for many – is beyond the scope of this report. Instead, our report seeks to ground discussions in facts about how they affect local government finances, the regional economy, the energy grid, and more.
For example, due in large part to these centers, the latest state projections show peak power demand in Wisconsin is expected to increase by more than 5 gigawatts between 2024 and 2030. This raises the question of who will pay for the added capacity to serve these centers. Electricity arguably represents the single biggest challenge for large data centers and the single biggest issue for policymakers, our report finds.
In considering data center proposals, elected officials have a difficult balance to strike. An August Marquette University Law School poll found 78% of registered voters in Wisconsin felt the costs of large data centers outweigh their benefits, while only 21% felt their benefits outweighed their costs.
Some Wisconsin communities have recently blocked construction of large data centers, either by rejecting a specific proposal or approving a blanket moratorium. One of the implications of this is that local officials may have leverage in negotiating data center deals with developers, since there is a credible risk that these proposals will be rejected.
The Forum reviewed deals between data center developers and the communities of Mount Pleasant, Port Washington, and Beaver Dam, as well as in two communities where centers were proposed but later canceled: Janesville and DeForest. In general, we found communities were striking reasonable deals that included fiscal safeguards.
However, state law makes it challenging for local officials to protect existing taxpayers in the case of data center developments that require significant tax increment finance (TIF) spending on infrastructure or developer incentives. Under current law, there could be initial tax increases on existing property owners – despite the possibility that once the TIF district closes, resident’s taxes could decline to what they were prior to the data center or even less.
In addition, most states offer a state sales tax exemption to data centers, as Wisconsin does. While other industries such as manufacturing receive similar treatment here, the cost of these forgone tax revenues is significant.
Our report concludes by offering a menu of options for state and local policymakers to consider in response to issues highlighted in our report. Click https://wispolicyforum.org/research/grounding-a-charged-debate-data-centers-in-wisconsin/ to read the full report and learn more.

This information is a service of the Wisconsin Policy Forum, the state’s leading resource for nonpartisan state and local government research and civic education. Learn more at wispolicyforum.org.