Indiana Data Centers Need Transparency and Firm Rules

There’s an interesting column to start the day. It’s from a guy I’ve disagreed with a lot over the years. But I read this article yesterday and thought—credit where it’s due. This is a pretty good column. It’s from Michael Hicks, a Ball State professor who writes regularly for the Indy Star. Speaking of the Indy Star, I think it’s okay to say this—they’ve had me cut a promo for something coming later this week. I’ve got a column coming out about the Mid-States Corridor. This horrible, rotten, no-good plan to connect 64 to 69 in southwest Indiana. People down there are outraged. You guys know one of my great accomplishments before I was put out to pasture—we stopped that corridor, at least for now. And hopefully that saved taxpayers billions. This new column goes into how Mike Braun is seen as one of the big financial beneficiaries of that project. It’s a long one—you’re going to love it. It should be out later this week, and we’ll share it once it drops. Anyway, back to Michael Hicks. Like I said, I’ve disagreed with him a lot. But this column he wrote about data centers was pretty well done. And data centers are the big topic right now—not just in central Indiana, but across the whole state. Hicks compares the hysteria around the data center boom to the hysteria around Walmart’s expansion about 25 years ago. You remember that—Walmart popping up everywhere. We had it in Brownsburg. For years, it was just Kmart. That’s where you shopped. Then suddenly this massive Walmart shows up, and within five to seven years, Kmart is gone. Does Kmart even exist anymore? Maybe a few, but not many. Hicks is talking about that same kind of fear—how people worried about Walmart changing communities—and how similar that is to the reaction we’re seeing now with data centers. Some of that pushback is warranted. Some of it probably isn’t. But this gets back to the bigger conversation we keep having—because what happens with data centers in Indiana is going to shape the landscape of this state for generations. We need to get this right. Not just be fast. Not just be first. But be smart about where these go and how they’re used. Data centers matter. They’re important. We’d be hypocrites to say otherwise—we’re literally on YouTube right now. We rely on them. They help with communication, access to information, and making life easier. Hicks does a good job explaining the different types of data centers. That’s something the industry hasn’t done well—explaining what they actually do and how they benefit people. There are three main types: First, digital currency mining—Bitcoin, Dogecoin, things like that. Second, cloud computing—where your data lives. Photos, medical records, all of it. And third, artificial intelligence. That’s the big driver of the current boom. These centers have existed for years, but the explosion over the past five years is because of AI. And look—I’m not going to say AI is all bad. There are concerns. There should be safeguards. But it also has real benefits. We’re all using it in some way now. So no, I’m not going to pretend all data centers are bad. Hicks also lays out the pros and cons well. One major issue—and a big reason for pushback—is jobs. Data centers don’t create many jobs after construction. Once they’re built, staffing is minimal. So people are asking—why are we giving huge tax incentives for something that doesn’t do much for the local community? That’s a fair question. One of the selling points has been that data centers will attract tech companies and high-paying jobs. But Hicks points out—that’s not really true. Data centers are standalone. Just because one shows up doesn’t mean tech companies will follow. That’s not how the industry works. You’re not going to suddenly become a tech hub because there’s a data center nearby. They don’t need to be near each other. And in reality, they tend to just attract more data centers. Hicks also points out something important—these shouldn’t be near residential areas. They’re noisy. They create pollution. They can impact property values. They don’t belong in high-density residential zones. Now, here’s where it gets controversial. Hicks argues the best place for data centers—logistically—is farmland. And he’s probably right. But that’s tough, because we’re already losing farmland. The character of the area is changing. Central Indiana has seen farmland swallowed up by housing, warehouses, and now data centers. Still, from a pure logistics standpoint, farmland makes sense. So that leads to the bigger issue. Data centers themselves aren’t the problem. The problem is how we’re handling them. We shouldn’t be giving away massive incentives. These companies need what Indiana offers more than we need them. If a data center is worth $300 million and pays full freight at a 3% tax cap, that’s about $9 million a year in property taxes. That’s huge—especially for small communities. And unlike other developments, they don’t bring heavy traffic or strain housing. But instead, we give them massive abatements. So instead of $9 million, maybe they pay $300,000 in year one—and it takes 15 or 20 years to reach full value. They might not even still be there by then. That’s a problem. We’re also giving sales tax breaks on equipment—more lost revenue. This would be a very different conversation if they paid their fair share. The other major concern is resources. Water. Electricity. The state needs to step in here. I’m not big on government intervention, but this is one of those cases. Data centers shouldn’t create financial or resource strain on existing residents. Utility rates are based on total usage. So if a data center goes up in one town, everyone across the state can end up paying more. That’s not right. We need safeguards. If we fix two things—the incentives and the resource strain—you’d see a lot less pushback. Because right now, we’re moving from “this is expensive” to “this might not even be available.” Electricity, water, gas—we can’t let those become scarce because of data centers. That shouldn’t happen. Hicks ends the column well. He says state and federal governments shouldn’t force or block communities from deciding on data centers. Exactly. This should be a local decision. Planning commissions, city councils, the people—those are the ones who should decide. If companies do a better job explaining benefits, if the financials improve, and if we protect resources—you’ll see less resistance. And a more balanced approach as Indiana becomes a data center hub.