The AI gold rush is on, and with it a rush of data center construction across the country that comes with massive tax breaks from state and local governments. The price tags of these incentives are rising sharply in states that disclose costs, according to a new report from Good Jobs First:

  • Georgia raised its projected fiscal year 2026 cost estimate by 664% – to $2.5 billion ­‑ and expects losses by FY 2027 to approach $3 billion. Georgia localities alone are projected to lose $1.1 billion in 2026 and $1.4 billion in 2027 due to state-awarded exemptions.
  • Texas now projects annual losses exceeding $1 billion, rising from $1 billion in FY 2025 to $1.3 billion in FY 2026. And they’ll keep growing: over the five-year period from 2025 to 2030, total losses could reach $9 billion.
  • Virginia estimates nearly $2 billion in combined state and local revenue losses in FY 2025 from its sales and use tax exemption.

Fourteen states, including Louisiana, do not disclose the recipients of data center incentives:

“States cannot have an honest debate about the costs and benefits of data centers if billions of dollars in lost revenue remain hidden from public view. “At a minimum, lawmakers should pause new subsidies, require complete transparency, and establish caps, sunset dates, and stronger safeguards,” [Kasia Tarczynska, Good Jobs First senior research analyst and the report’s author] said.

Millionaire (and billionaire) taxes pick up steam 

More states are raising income-tax rates on their wealthiest residents. Massachusetts voters recently decided to increase taxes on millionaires, which resulted in more money for state coffers – and no exodus of high-income earners. Governing’s Jared Brey reports on efforts in other states: 

Washington, long a state with no income tax, this year adopted a 9.9 percent tax on incomes above $1 million. Maine recently enacted a budget with a 2 percent surcharge on high incomes. Rhode Island lawmakers are considering a similar proposal with a rate of 8.99 percent. 

The federal tax and budget megabill is driving momentum on millionaire taxes. The new law includes massive tax breaks that will benefit wealthy people and large corporations, which will be partially offset by cuts to safety-net programs used by people with low incomes:

“That dramatic juxtaposition of benefit cuts for poor people to pay for tax reductions for millionaires and billionaires really caused us to start thinking about a tax on very high earners,” says Washington state Sen. Jamie Pedersen, the Democratic majority leader and sponsor of the new state tax. 

Blocking climate change lawsuits against oil companies

No lawsuits could be filed in Louisiana that aim to hold oil and gas companies accountable for the damages and injuries from global climate change, under a new state law. The Times-Picayune | Baton Rouge Advocate’s Alex Lubben explains how the move is part of a broader push by state leaders to prioritize industry over people: 

The Legislature also passed a bill this session that limits the ability to sue aerospace companies, amid widespread speculation that SpaceX, the company founded by newly minted trillionaire Elon Musk, is eyeing a remote tract of land in Vermilion Parish.  … “Somebody’s going to be left holding the bag, and the real question is: Should it be the people who cause the problem, or should it be the people who’ve been injured? [House Bill 804] presumes that it should be the people who are injured,” [said Mark Davis, a Tulane professor of environmental law.]

Who lost and who won this legislative session?

The Louisiana Legislature recently concluded its three-month lawmaking period, although a crucial question of whether teachers and support staff will receive a pay cut next year remains unresolved. The Times-Picayune | Baton Rouge Advocate’s Stephanie Grace lays out her losers from the 2026 legislative session:

New Orleans: Lawmakers who make up the Republican supermajority seemed to paint a big bullseye on the city, in ways that at times came off as downright vindictive. Their first target was Calvin Duncan, an exonerated former state inmate who was overwhelmingly elected last fall to become clerk of Criminal District Court. … Lawmakers subsequently eliminated nine judgeships from various courts, abandoning plans to eliminate only the most junior Criminal Court judges in conference committee without explanation.

Black voters: The U.S. Supreme Court’s late April decision in Louisiana v. Callais didn’t end the Voting Rights Act, but it seriously undermined the protections it has long offered. The Legislature’s mad dash to eliminate one of the state’s two majority Black congressional districts, in the midst of a nationwide rush to redraw maps mid-decade ahead of the fall midterm elections, added insult to injury. 

And winners:

Jeff Landry: If getting what you want makes you a winner, then the governor earned a spot on this list. He spent part of that session-opening speech railing against the courts in New Orleans, and by the time lawmakers headed home, various judicial entities were seriously downsized. He called off an ongoing congressional election to give fellow Republicans another safe seat. He championed some breaks aimed at attracting even more big investments. And he even got that inspection sticker bill through.

Teachers: Yes, voters rejected a constitutional amendment that would have finally given Louisiana’s underpaid educators a modest annual raise instead of the one-time stipends they have received in recent years — most likely due to other parts of the proposal or just a general pique with government. … The new plan, which initially involves shifting state money from other education purposes, is proving potentially problematic. But at least the people at the highest levels of government are belatedly acknowledging how much public school teachers have contributed to the overall student gains they all celebrate.

Number of the Day

0.44% – Cost of fast food as a share of median monthly household income in Louisiana, the third-highest rate in the nation.  (Source: WalletHub)