The Invisible Trillion · The Legal Weapons

The Money That Comes With It

All of this arrives wrapped in the language of opportunity, and that wrapping matters, because it’s what splits a community against itself. Local development authorities describe these projects as once-in-a-generation lifelines — hundreds of jobs, millions in new tax base, a way to reverse decades of decline. In a place that has watched its young people leave, that is a powerful pitch, and the people making it often believe it.

The arithmetic is less flattering, and one deal shows it about as starkly as a deal can. In Orangeburg, New York — twenty-five miles from JPMorgan Chase’s brand-new Manhattan headquarters — the largest bank in the country asked the local development agency for tax breaks to expand a data center, and got the exact break it requested the following month: around $77 million, the biggest per-job data center subsidy in the country, in exchange for a single permanent job. The public hearing the law required before the vote is the part to picture. Nobody came. After twenty minutes of silence, an agency official closed the meeting. Two weeks later, the deal was approved.

Orangeburg isn’t a freak; it’s the pattern in miniature. A proposed data center in Genesee County, New York, sought $801 million in tax breaks for 125 jobs — about $6.4 million each. Virginia’s data center tax break began in 2008 as a modest bill meant to lure one employer to a struggling rural county; the data centers went instead to the wealthiest part of the state, and the break now runs Virginia around $1.6 billion a year. These are highly automated buildings — a hyperscale campus might permanently employ a hundred or two — and whatever tax revenue they throw off is frequently offset, sometimes more than offset, by the incentives handed over to land them.

And the jobs that justify the breaks are rarely counted afterward. A watchdog review found that not one state tracks both the jobs a data center promises and the jobs it actually delivers, even though the promise of jobs is the whole basis for the subsidy. None of this means the deals are always bad; some net out positive, and it depends entirely on the terms. But “it’ll bring jobs and taxes” is a line to read closely rather than accept, because the specific numbers — when anyone is allowed to see them — often say something the pitch doesn’t.

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