(The Center Square) – Fresh off capturing the party’s first state government trifecta in 60 years, Democrats in Arizona have set their sights on their first major policy goal: a moratorium on data center development.
Attorney General Kris Mayes, who breezed past her Republican challenger (Senate President Warren Peterson, R-Gilbert) in the Nov. 3 general election, called for such a measure during her reelection campaign.
On Thursday, Mayes, along with representatives for Democratic Gov. Katie Hobbs and Senate President-elect Priya Sundareshan, D-Tucson, said the moratorium would be tackled when the Legislature convenes in January.
Mayes told The Center Square that she will do everything in her power, with the regulatory steps available to her, to cull the more than 100 data centers now in the development pipeline.
“I plan to continue to be very aggressive in using nuisance laws where it is appropriate to protect Arizonans from industrial scale water users that are harming their neighbors – whether that’s data centers or other out-of-state corporate entities,” Mayes said. “We plan on being very aggressive in using antitrust law to prevent corporations from harming Arizonans.”
Last year, Arizona’s budget carved out a three-year break in the state’s tax exemptions for data center developers.
Before that break could take effect, though, the Arizona Commerce Authority (who oversees the state’s tax break programs) approved 107 applications for data center tax breaks, according to Mayes.
Sundareshan told The Center Square the Senate will do everything it can to cull data center growth, citing the ACA’s last-minute tax break approval as a reason for quick action.
“I think there’s a lot more that needs to be done that we are talking, that would make sure that data centers are addressing their water and energy use and being good neighbors in the process,” Sundareshan said. “So the data center moratorium that Attorney General Mayes has proposed until we can figure out those requirements may well be one way to go. So I’m glad she started that conversation and is starting to rally the troops and talk to voters as she’s been on the campaign trail because we know we certainly have been hearing a lot from our from our voters as well.”
Mayes pointed to SpaceX’s proposed 747-acre supercomputing and artificial intelligence data center, which will be near the Willcox Playa and Highway 191 in Cochise County, and Menlo Digital’s Ahwatukee data center development as projects that she’d like to hit the pause button on.
“This is literally madness,” Mayes said. “Those two developments alone are perfect examples of why we need to take a beat and say, ‘Hold on. No new data center developments until we get our hands on whether we have the power to service these things.’ ”
Christian Slater, Gov. Katie Hobbs’ communications director, told The Center Square this week that Arizona’s newfound Democratic trifecta will do everything in its power to make sure that the current three-year tax break moratorium becomes permanent.
Above all, Slater said Hobbs wants Arizona’s data center operators to pay their fair share for energy, seconding the concerns that Mayes and Sundareshan talked about.
“The governor will also work to create guardrails that ensure data centers don’t increase energy costs on everyday Arizonans, don’t pump Arizona’s water unchecked and listen to the real concerns raised by local communities who are worried about data centers in their neighborhood,” Slater said.
John Kavanagh, R-Fountain Hills, who served as the GOP’s majority leader in the Senate last session and who will be the Senate minority leader in 2027, told The Center Square that the Democrats’ data center efforts are a moot point.
“It’ll probably make no difference because the governor’s ordered moratorium was so poorly worded that they have over 100 data centers already in the pipeline that they can’t stop,” Kavanagh said. “But I think it’s a real mistake to declare a moratorium on them because we really need them, not only for defense but just for the computing services and amenities that we all rely on every day.”
Instead, Kavanagh said Democrats should work toward enacting data center regulations that ensure operators are paying their fair share for electricity while adding water conservation methods to cut back on usage.
Josh Heywood, executive director of Project 48 Arizona, which is a nonpartisan organization that researches economic growth, said Kavanagh’s comments are in line with what he’d like to see done in the new year.
Heywood’s questions center around why the data center industry is bearing the brunt of lawmakers’ scorn in Arizona, when other water-intensive facilities (such as semiconductors and golf courses) skate by unchecked.
“What exactly are we stopping and why, is the concern, and I don’t think we’ve really heard the specific concern that they have,” Heywood told The Center Square. “Is it water? Well, how much water is too much water?
“And it’s also predicated on the fact that, is there not other legislation we can pass that somehow addresses the water problem? What if it’s allocating some of our tax revenue to go toward water?” he said.
Heywood called on Democrats to think about the tax revenue that data centers provide to the state before kneecapping the industry entirely, finding an alternative to an outright moratorium in 2027.
Sundareshan said Democrats will act in 2027, answering the call of Arizonans who have made it clear that data center development is an urgent issue when the party takes charge of the Legislature.
“Our legislative Democrats, who have been working very hard to knock on doors and talk to voters and have been very close to what voters are feeling over this campaign cycle, know that data centers are a top-of-mind issue for the voters,” Sundareshan said. “And so, we absolutely know that action needs to be taken, and we’re looking forward to delivering that next year.”
This article was originally published by The Center Square and is republished under its open-access guidelines.