Overview:
-Black Mayors of Michigan urged lawmakers to pass data center tax breaks for community investment.
-Some mayors were listed as signatories without their consent.
-Environmental advocates argue data centers could derail climate goals and increase utility bills.
A letter sent to Michigan House legislators last week from the Black Mayors of Michigan urged lawmakers to pass data center tax breaks ahead of a vote on Wednesday. The letter said the legislation would bring investment to their communities and generate property taxes for municipalities and school systems.
Yet not all the mayors whose names are on the letter signed it.
“I was highly upset that they would even put my name on something without asking me,” Saginaw Mayor Brenda Moore told Planet Detroit. She said her name was added to the letter after she didn’t respond to an email asking for her support for the legislation, which could give tax breaks to companies like Google and Microsoft to build water and energy-hungry data centers in Michigan.
Black Mayors of Michigan is a group of mayors from 14 cities that face similar issues. Moore represents the second-largest city in the group and is included as a signatory on the letter. She expressed concern about the tax breaks creating an unequal playing field for businesses and that data centers could drive up residents’ utility bills.
“Most cities are already complaining about the water bills and/or the (energy) bills,” she said.
Jackson Mayor Daniel Mahoney declined to answer when asked if he had signed on to the letter.
Benton Harbor Mayor Marcus Muhammad, who serves as chairman of the Black Mayors of Michigan, said mayors were asked to respond if they did not support the letter. This led to an unknown number of signees being added to the letter who hadn’t responded to the email.
He said the group would use a “more concrete, 100% mistake-proof method” in the future. He declined to share a copy of the email he sent to mayors soliciting their support.
Letter came at a heated moment in Michigan data center debate
State Rep. Joey Andrews (D-Saint Joseph) sent the letter to all House Democrats and Republicans on Sept.24, a day before the House was scheduled to vote on HB 4906, which he introduced, and its companion bill SB 237.
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Michigan House OK’s data center tax break that advocates say threatens climate goals
Critics say water and power-hungry data centers could increase prices for utility customers, deplete groundwater and compromise Michigan’s renewable energy targets.
The House passed SB 237, which exempts large data centers from use taxes. This bill is being sent back to the Senate. HB 4906, was pulled from voting twice after failing to gain enough support.
The vote was preceded by a heated back and forth between Andrews and environmental justice advocates who say that, without adequate guardrails, data centers will derail the state’s climate goals, drain water resources and increase residents’ utility bills.
Michigan’s 2023 renewable energy legislation, which looks to achieve 100% renewable generation by 2040, contains an “offramp” provision allowing coal or gas plants to stay online if there’s insufficient generation to meet demand. Data centers could also impact the state’s groundwater resources by using millions of gallons of groundwater a day to cool servers.
Charlotte Jameson, chief policy officer for the Michigan Environmental Council, previously told Planet Detroit that amendments added to the tax break legislation weren’t “fine-tuned enough” to protect ratepayers from subsidizing the costs of providing energy and water to data centers.
Andrews has said advocates are ignoring the economic benefits that data centers could bring to predominantly Black areas. A proposed data center in Andrew’s district, which includes Benton Harbor, could generate an estimated $21 million in annual property taxes.
The lawmaker’s rhetoric has been remarkably pointed, accusing environmental justice groups of being “fanatical” and saying they needed therapy to deal with their “collective narcissism.”
Andrews told Planet Detroit that he wasn’t worried that the letter could damage the coalition needed to pass the data center bills, saying “everybody relevant recognizes how good this legislation is.”
The Black Mayors’ letter also seemed to support Andrews’ contention that the passage of these bills was an equity issue.
“The boost to local tax revenues would strengthen the financial stability of our cities, allowing for improved public services, infrastructure investments, and enhanced community programs,” the letter reads.
State Rep. Laurie Pohutsky (D-Livonia), who voted against the data center tax breaks, said this kind of appeal from local leaders carries weight with lawmakers
“If I receive something from any of my mayors or a council supervisor that certainly weighs into my decision-making,” she said.
The letter did receive some considered support. Pleasant Ridge Mayor Bret Scott, who signed the letter, replied to an email from Planet Detroit, saying that the tax breaks struck a balance between economic development and protecting the environment.
“(I)t makes sense to me that Michigan, a state that has already strongly expressed its desire to be mindful of its environment, (should) be a place where data centers should go,” he said.Andrews has said he plans to bring his bill back up for a vote during the “lame duck” period following the November election.