Here’s what’s going on: Illinois Governor J.B. Pritzker wants to hit pause on state tax breaks for new data centers—just for a couple of years, starting July 1, 2026. He laid this out in his recent State of the State and budget talk.
Right now, Illinois hands out tax credits and other perks to big data center projects to lure them in. Pritzker’s plan would hold off on those incentives for two years, a sharp turn from the state’s old strategy.
So, why the change? Data centers are popping up all over Illinois, and they use a ton of electricity—think heavy-duty computing and nonstop cooling. This boom is pushing up energy demand and, not surprisingly, driving up power bills for residents and businesses. Pritzker says the state needs time to really dig into what these centers are doing to the grid, utility costs, and overall resources. He doesn’t want the state’s growth to leave families and small businesses stuck with bigger bills or a shaky power supply.
There’s a bigger energy plan, too. Pritzker wants grid operators to make data centers pay for the extra power capacity they use, so regular folks aren’t footing the bill for new infrastructure. Lawmakers are also weighing new rules—like the Power Act—that would force data centers to pay for the energy and water they consume and meet stricter environmental standards if they want to build in Illinois.
What’s actually getting paused? Any new state tax credits or exemptions for big data center projects that hit certain investment and job numbers. No new approvals for two years, starting in July 2026, while the state figures out the true impact on the economy and utilities.
People are split. Environmental and consumer groups are cheering, saying it’s about time data centers paid their fair share and stopped passing costs onto everyone else. On the flip side, industry leaders warn this could scare away investment, slow down job growth, and make Illinois less appealing compared to other states trying to woo tech companies."