MISSOULA — Data centers are a hot and controversial topic across the country right now.
Much of the controversy centers around the impacts of data centers on both human and ecological health.
The University of Montana’s Bureau of Business and Economic Research (BBER) has now published a study on the economic impacts of data centers.
WATCH THE VIDEO BELOW:
It is solely focused on impacts to jobs, tax revenue and energy for hyperscale data centers - centers 500 Megawatts (MW) and above.
Jeff Michaels, director of the BBER, says the study was largely conducted through economic modeling (through the use of REMI modeling) of what Montana may look like with differently sized hyperscale data centers.
“That's the kind of facility we don't have right now in Montana. We got nothing like it. So we sort of created some models of what that could look like here and estimated, you know, job creation, income creation and a lot of work on property taxes because that's a big part of what Data centers could bring to the state,” said Jeff Michael.
“The findings overall were that, we looked at data centers and in terms of their capacity,” said Michael.
Michael says that depending on the size of the data center, the number of jobs created and taxes generated vary.
The study looked at 500 MW increments, examining both what each increment could bring in terms of direct and construction jobs. It also had estimates for personal income growth and tax revenue generation.
The study found that impacts from a 1,000 MW data center that takes four years to build could directly result in 500 construction jobs and up to 1,500 statewide jobs. Those jobs may result in up to a total personal income increase of $93 million.
Once the 1,000 MW data center is fully built and furnished with several billion dollars worth of Nvidia chips, the study estimates that the data center could have 250 direct jobs at the facility and a total of 452 jobs statewide. That would result in a total personal income increase of an estimated $34.2 million.
“Still a big employment generator, but maybe not in terms of thousands, but in hundreds of jobs,” said Michaels.
The potential tax revenue increases would also be significant, with a 1,000 MW data center projected to generate $47 million in annual property taxes.
The property tax payments could also increase with co-developed new power generation, with the potential result of $54 million.
“The biggest benefit of Montana, all these jobs would be a benefit, but the biggest potential benefit in the long run would just be a huge expansion in the property tax base,” said Michaels.
With that benefit to the tax base, individuals’ property taxes could see a decrease, depending on how much their county decides to mill.
“A certain amount of it is sort of in statute, and that's we follow the statute, which generally results in this sort of 50-50 split of new revenue and some reduction in the mills. So that's sort of how we follow it. I mean, it would be at the discretion of the county; they could go beyond that if they wanted to,” said Michaels.
He also says, however, that the increases in property taxes could vary over the years. He says this is because the billions of dollars worth of chips contained within a data center depreciate rapidly, ultimately decreasing the overall value of the property.
With all of the potential monetary benefits data centers could bring, it is important to note that all the findings were under the guidance of current state law, which could change in the upcoming legislative session.
