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Thursday, March 15, 2007

A data center is exactly the sort of employer that regions should strive to lure – it represents a major corporate investment, provides high-paying jobs, and employs a highly educated workforce. However, it’s also the sort of facility that Texas does little to attract with the state’s economic development laws.

The state provides incentives for school districts that want to help certain companies move to and grow in certain areas. Districts can limit the appraised property value of eligible investments, such as a new microchip plant, without being penalized by the school finance system.

The list of eligible investments is limited, as it should be. It includes only projects associated with manufacturing, research and development, and specific clean energy endeavors. Senate Bill 1105 would have expanded this list to include data centers.  The bill was passed by the Texas Senate, but it died in the state House of Representatives.

Now, the state needs to be very careful in deciding where and when to offer these incentives. Officials must ensure they’re not throwing money at a company that was likely to move here anyway, or that won’t have much of an impact on a region’s economy.

However, data centers are an increasingly important source of high-paying jobs. For example, Citigroup recently purchased 50 acres in Georgetown to construct a 300,000 square foot data center. Total capital investment for this project is estimated at $450 million with 50 full-time jobs paying an average of $70,000 per year.

Central Texas is especially well-positioned to attract even more of these desirable projects because of the region’s highly educated workforce. However, other states are, too. To continue growing our economy with good jobs, we need whatever tools we can get – including a strong educational system, effective health care, and, yes, responsible incentive programs. SB 1105 would have been another such tool.