By Reagan Priest | State Affairs
As Gov. Katie Hobbs rolls out her policy priorities for 2026, it seems there is a bipartisan appetite for reigning in data center development in Arizona.
Hobbs told the Yellow Sheet Report onThursday that her office will pursue a repeal of the state’s data center tax incentive and a data center water user fee this session. The governor’s announcement comes after Republican Rep. Neal Carter introduced a bill on Jan. 2 that would end the data center tax incentive this year.
“We need to strike the right balance, and I think ending the tax incentive is the right way to do that,” Hobbs said. “We’re not telling cities what they can or can’t do, and I think you see bipartisan support for doing that.”
Rose Law Group Founder & President Jordan Rose, whose firm represents many data center developers, offers a different perspective, previously telling RLGR that: “Arizona is attracting the world’s most innovative companies right now — pulling the rug out from their data storage facilities which are necessary to attract this caliber of job creators will have real negative economic development consequences.”
