While Maryland counties are throwing up roadblocks, other states are asking how the data center boom can reduce the burden on taxpayers and build the infrastructure of the future.
I’m from Tennessee, so possibly I look at this a little differently.
When a company comes along prepared to invest hundreds of millions, sometimes billions, of dollars in infrastructure, my first instinct isn’t to figure out how quickly government can chase it away. My first question is: How can we make this work for the people who already live here?
Maryland is asking the opposite question.
Amazon Web Services recently withdrew its application for a proposed data center in Lusby near the Calvert Cliffs Nuclear Power Plant. Amazon hasn’t publicly said why it walked away, so nobody should pretend we know the answer. What we do know is that Calvert County confirmed the withdrawal on August 4. Two weeks later, county commissioners approved a six-month moratorium on new data center applications and approvals.
And Calvert isn’t alone.
Across Maryland, counties and municipalities have been considering moratoriums, restrictions and outright bans on data centers. The message being sent to one of the fastest-growing sectors of the American economy is hard to miss.
Meanwhile, Maryland has serious fiscal problems.
The state is staring at another multibillion-dollar structural budget hole. Maryland has also spent decades depending heavily on federal employment and federal spending. That would create some urgency to diversify the tax base and attract private investment.
Instead, Maryland politicians are making it harder.
Look south.
Virginia figured out years ago that data centers can become enormous revenue generators. According to figures cited by the Maryland Tech Council, Virginia’s data center industry was generating roughly $640 million annually in state tax revenue and another $1 billion in local revenue as of 2022, while supporting tens of thousands of jobs and billions in economic activity.
That doesn’t mean Maryland should unthinkingly copy Virginia.
It means Maryland should learn something from it.
In Tennessee, we’re having many of the same arguments. People are concerned about power. They’re concerned about water. They’re concerned about who pays for substations, transmission improvements and other infrastructure.
Those are fair questions.
Tennessee’s response offers a better model than simply slamming the door. Legislation passed by the Tennessee House in 2026 would generally prevent utilities or municipalities from absorbing electric infrastructure costs created by large data centers. The principle is simple: If your project requires major new infrastructure, you should pay for it rather than handing the bill to existing homeowners and businesses.
That’s the conversation Maryland ought to be having.
Go further. Imagine using the extraordinary tax base generated by large data centers to reduce local property taxes. Instead of treating homeowners like an ATM every time government wants more money, dedicate a meaningful share of new data-center revenue to property-tax relief.
That is the opportunity states like Tennessee should pursue aggressively.
There are legitimate environmental questions. A massive data center cannot simply be dropped next to a neighborhood without considering water, electricity, noise, backup generation and land use. Conservatives should understand that better than anyone. Property rights apply to the family that already owns the house next door, too.
But regulation and prohibition are two very different things.
Set standards. Protect residential communities. Require developers to pay for infrastructure their projects necessitate. Establish water-use requirements. Encourage facilities near appropriate power generation and transmission capacity. Then make sure taxpayers receive a concrete benefit from the economic development.
That’s governing.
Blanket moratoriums are easy. Saying no is easy. Building a regulatory system that protects residents while welcoming investment takes leadership.
The irony is that Maryland wants the benefits of the artificial intelligence revolution. State government wants technology companies. Universities want AI research. Businesses want cloud computing. Consumers want faster digital services.
All of that requires real infrastructure somewhere.
Servers aren’t imaginary. The cloud isn’t actually floating in the sky.
Somebody has to build the buildings, generate the electricity, and house the computers that make the digital economy work.
Maryland has a choice. It can establish reasonable rules and attract billions of dollars in investment, or it can do what it has a proclivity to do. Watch companies take those billions to Virginia, Tennessee, and other states willing to find a way to say yes.
And if those states are smart, they’ll turn that growth into something residents can see on their own kitchen tables: lower taxes, better infrastructure and stronger communities.
That sounds a lot better than another moratorium.
Endnotes
1. Calvert County Government, “AWS Withdraws Proposed Calvert County Data Center Project.”
https://www.calvertcountymd.gov/4059/Amazon-Web-Services
2. Calvert County Government, “Calvert County Commissioners Enact Six-Month Data Center Moratorium.”
https://www.calvertcountymd.gov/m/newsflash
3. Tennessee General Assembly, “HB 1847: Data Center Electrical Network Requirements.”
https://wapp.capitol.tn.gov/apps/BillInfo/Default?BillNumber=HB1847
4. Tennessee Department of Economic and Community Development, “OpenECD: Tax Incentives.”
https://www.tn.gov/ecd/resources/openecd/openecd-tax-incentives.html
5. Tennessee Department of Environment & Conservation, “Data Centers.”
https://www.tn.gov/environment/policy/data-centers.html
6. Tennessee General Assembly, “SB 1682: Data Center Registration and Utility Reporting.”
https://wapp.capitol.tn.gov/apps/BillInfo/Default?BillNumber=SB1682&GA=114
Noah Jackson is a contributing editor at Direct Line News.
Direct Line News is a Maryland-based free-access publication committed to the Republican reform tradition.
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