STEVE INSKEEP, HOST:
Let's get some insight into the fight over data centers in this country. An analysis from the Pew Research Center earlier this year found more than 1,500 new data centers were in some stage of planning, and of course, there's plenty of protest. One of the selling points is that data centers will create local jobs, especially in rural areas. So is there any data to back that up? From KUT in Austin, Mose Buchele reports.
ABIGAIL LINDSEY: And this is Old Zorn Road.
MOSE BUCHELE, BYLINE: On a hot August afternoon, Abigail Lindsey drove me around her home about an hour from Austin and San Antonio. We passed fields dried brown by the Texas sun, hay bales, livestock.
LINDSEY: Everyone out here has animals, whether it's chickens or goats, cattle, horses. We have a lot of horses out here.
BUCHELE: But our tour was about what comes next. Developers want to replace some of these farms with data centers, and Lindsey and some of her neighbors oppose those plans.
LINDSEY: They're going to touch every single part of your life, from the value of your home to your air quality to your water to your light.
BUCHELE: Guadalupe County, where much of this land sits, has welcomed the centers with tax breaks. One 10-year agreement gives a company a 90% county tax cut in the first five years of operations. It slowly increases the tax obligations for the next five years. And one reason for these deals is the economic growth promised by developers. At a county commissioners hearing this spring, Cynthia Thompson with the company CloudBurst Data Centers promised 480 new jobs at the center. And that was just the beginning.
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CYNTHIA THOMPSON: We are an economic multiplier. The project will stimulate local spending, jobs.
BUCHELE: Pointing to an industry-sponsored study, she said that every new job at the facility would create an estimated 6.4 other new jobs locally, increasing wages and spending throughout the community. How do we know? Economists say there's still not a lot of academic research to back up claims like these. That's despite data centers having been around for a while.
DANIEL YUE: These things are not new. They've been being built since the start of the internet.
BUCHELE: Daniel Yue is a professor at Georgia Tech's Scheller College of Business. He recently co-authored a study showing that communities that hosted earlier generations of data centers saw some economic growth.
YUE: Something like on the order of 1% in the first three years of first data center entry, and something like maybe 5% over the longer term.
BUCHELE: But that growth did not happen everywhere. Yue found the economic benefits were only really apparent in metropolitan areas where other businesses are more likely to open up around data centers, something economists call spillover.
YUE: The implication is that rural counties may not be able to depend on spillovers to drive job growth or new business creation in the same way that metro areas might be able to.
BUCHELE: That spillover's important because the centers themselves don't usually bring a lot of permanent jobs, says Mark Muro, who co-authored a different study from the Brookings Institution.
MARK MURO: There's certainly an initial burst of construction jobs, but they're not long-term employment sources.
BUCHELE: Representatives from CloudBurst Data Centers did not respond to emailed questions about how they estimated their projects' impacts, and Guadalupe County would not comment because of lawsuits brought by the opponents of the data centers. But both Yue and Muro say there are reasons beyond jobs communities might want these businesses. Increased tax revenue for school districts is a big selling point. The question is whether those benefits outweigh the costs, like increased demand on water, electricity and quality-of-life concerns.
Back on those country roads in Texas, Abigail Lindsey says she and her neighbors are a firm no.
LINDSEY: It's always this - if we just build one more thing.
BUCHELE: It's a skepticism that's reached the state's top political leaders. Last month, Texas Governor Greg Abbott announced a pause on new data center approvals because of what it might mean for the state's power grid.
For NPR News, I'm Mose Buchele in Austin.
(SOUNDBITE OF BLACK MOTH SUPER RAINBOW'S "DRIPPY EYE") Transcript provided by NPR, Copyright NPR.
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