New York Governor Kathy Hochul has announced her intention to end tax subsidies for large data centers in the state. This proposal, if enacted, would significantly impact the tech industry and future data center projects across New York.
The governor’s plan targets property, sales, and mortgage tax breaks, including those issued by local industrial development agencies (IDAs). Hochul’s proposal aims to block subsidies for so-called hyperscale data centers defined as those requiring 50 megawatts of electricity or more. Such facilities could power between 25,000 to 50,000 homes highlighting their substantial energy demands.
Governor Hochul’s Stance on Data Center Subsidies
During a roundtable event in Kenmore on July 20, 2026, Hochul emphasized that she supports a narrow exclusion to prevent IDAs from issuing tax breaks to hyperscale data centers. She believes that these highly profitable companies do not need subsidies to operate in New York. “They will still come without getting $1 million per temporary job,” Hochul stated, emphasizing the need for more leverage in negotiations with these companies.
The governor’s comments came during a discussion on her executive order signed last week, which imposes a one-year moratorium on state permits for new data centers. This moratorium could affect several proposed projects, including the Stream US Data Center in Genesee County and the Riverview Innovation & Technology Campus in the Town of Tonawanda. Stream has requested $1.46 billion in tax breaks from the Genesee County IDA, while the Riverview project has not yet sought subsidies but faces potential restrictions.
Impact on Existing and Proposed Data Centers
The proposed ban could prevent a third data center in Chautauqua County from seeking tax breaks. Hochul’s moratorium on state permits for new data centers has already put the Stream US Data Center project on hold. The Genesee County IDA has not yet voted on the requested $1.46 billion subsidy package but is poised to do so soon.
Despite the potential loss of subsidies, the Genesee County IDA has argued that the data center would generate hundreds of millions in payments and taxes, which would be used to overhaul the county’s water system. Without the data center, this project would be funded through rate increases, according to officials.
Reactions from Critics and Supporters
Critics of data center subsidies have praised Hochul’s plan. Sarah Howard, head of the group Allies of the Tonawanda Seneca Nation stated, “We strongly support a prohibition on IDAs allocating taxpayer subsidies to hyperscale data centers.” John Kaehny, executive director of the nonprofit advocacy group Reinvent Albany also supported the governor’s stance, stating that Hochul “is on the right track.”
Kaehny, however, pushed for further action, urging Hochul to ask her appointees to the New York Power Authority (NYPA) board to stop providing low-cost power to data centers and other high-load, low-yield businesses. State Assembly representative Bill Conrad emphasized that New York has resources that data center builders want and that the state should recognize this advantage.
“This is where they want to be,” Conrad said. “[We have] a cold climate, plentiful access to water, plus cheap land. They’re going to want to come, so you have to have those guardrails. Let’s not be a cheap date. Let’s make them pay.”
