They're outta there, but not without some drama

Axing data center tax breaks, cutting child care subsidies and rural schools, a tough switcheroo for cities and counties, belated funding for cops, and "shiny" die.

A cadre of high-priced lobbyists watched glumly as the House narrowly voted to end a lucrative tax break for high-tech data centers, a proposal that turned on just a handful of votes in the final days of the Legislature’s session.

Senate Bill 6231, introduced by Sen. Noel Frame, D-Seattle at the behest of Gov. Bob Ferguson, would end a sales tax exemption for refurbishing data centers, which have increasingly come under fire in recent years for their rapacious consumption of electricity and water even as the facilities proliferate to feed the massive demand for computing power from AI. A broader bill to regulate the centers died earlier in the session.

The tax break was installed years ago to incentivize data centers, particularly in rural parts of the state with ample and cheap hydropower. Getting rid of it would bring in an estimated $63 million for the state during the current biennium and more than $200 million over four years. Supporters of dumping it argued that the centers brought fewer jobs than promised and siphoned off local tax revenue.

That money was “booked” in the final budget deal, making Frame’s bill something of a must-pass in the final hours of the session. But its fate was up in the air as late as Wednesday night because of heavy pressure from Big Tech and some labor unions. Building and refurbishing data centers is lucrative work for construction companies and union labor, especially electricians.