* From Gov. Pritzker’s State of the State address…

We need to think critically about our future energy usage with the needs of Illinois households at the forefront. So, in the face of rising demand and surging prices, I’m proposing a two year pause on authorization of new data center tax credits. With the shifting energy landscape, it is imperative that our growth does not undermine affordability and stability for our families.

* The leaders of the Illinois AFL-CIO, Chicago Federation of Labor, Chicago & Cook County Building & Construction Trades and several trade unions, plus the Illinois Education Association and Climate Jobs Illinois recently sent the governor a letter about the proposed pause…

Dear Governor Pritzker,

On behalf of Climate Jobs Illinois, the Illinois AFL-CIO and the hundreds of thousands of working men and women of labor in our ranks, we write to express concern about the proposed pause on the Illinois Data Center Investment Tax Credit program outlined in your FY2027 budget address.

Under your leadership, Illinois has made tremendous progress attracting major industries and strengthening our economic competitiveness. Your administration’s focus on advanced manufacturing, clean energy, life sciences, and emerging technologies like quantum computing has helped move Illinois up significantly in national business rankings while also creating pathways to high-quality union jobs to bring these proposals to life. Data center development is increasingly part of that economic and energy future. These facilities represent billions of dollars in private investment, thousands of union construction jobs, and long-term opportunities for Illinois workers across the building trades, electrical sector, and energy infrastructure workforce.

Data centers also drive demand for the kind of large-scale energy development — including nuclear, renewable energy, transmission, and emerging technologies like long- duration storage — that will be essential for Illinois to meet both its climate goals and its growing electricity needs.

The growth of this emerging digital economy has created a new kind of infrastructure needs. Illinois has an opportunity to meet the demand and build that infrastructure here — with union labor and strong standards — or watch it move to neighboring states. Since the passage of the Illinois Data Center Investment Program in 2019, Illinois has attracted billions in investment and established itself as a major national data center hub. That investment has supported thousands of construction jobs and generated significant tax revenue for local communities and the state.

For Illinois communities, this kind of investment can also have a meaningful impact on affordability. Expanding the commercial and industrial tax base helps generate new revenue for local school districts and municipal services while easing the property tax burden that falls on homeowners and small businesses. In many communities, projects of this scale can provide a stable long-term revenue stream that supports classrooms, public safety, and local infrastructure.

However, investment in this sector is highly mobile and increasingly competitive. States across the Midwest and Sun Belt are aggressively positioning themselves to attract data center development, often with fewer regulatory barriers and greater policy certainty. A pause in Illinois’ incentive program risks sending a signal that investment should go elsewhere at a time when our neighboring states are actively competing for these projects. Equally important, the labor standards tied to the Illinois Data Center Investment Tax Credit are currently the only mechanism ensuring that data center development in Illinois comes with strong workforce protections. If the tax credit is paused or eliminated without a replacement framework in place, Illinois would have no enforceable labor standards for this sector—leaving the door open for developers to build major facilities using non-union, out-of-state labor. That would undermine the very workers and communities this investment is meant to benefit.

At the same time, we recognize the legitimate policy questions surrounding emerging technologies, including artificial intelligence and the use of biometric data. Illinois has long been a national leader in protecting privacy through the Biometric Information Privacy Act (BIPA), and those protections are important. As policymakers consider ways to ensure Illinois remains competitive for data center investment, we believe it is essential that any discussions about modernizing BIPA proceed thoughtfully and carefully, maintaining strong consumer protections for individuals while providing clarity and predictability that allows responsible investment and infrastructure development to move forward. In other words, Illinois should not have to choose between protecting privacy and building the infrastructure of the future.

Rather than pausing the Data Center Investment Tax Credit program, we respectfully urge your administration to work with labor, industry, the General Assembly, and other stakeholders to identify a balanced path forward that:

• Preserves Illinois’ competitiveness for data center investment
• Ensures projects create strong union construction and infrastructure jobs
• Supports the build-out of electricity generation and grid infrastructure necessary to power these facilities
• Maintains Illinois’ leadership in protecting the privacy and rights of its residents

Illinois can lead in bringing the digital and energy infrastructure to Illinois. With the right policies in place, we can ensure that this growth supports good union jobs, strengthens our energy system, and benefits communities across the state.

We appreciate your leadership and stand ready to work with your administration and the General Assembly to ensure Illinois continues to be a national leader in innovation, clean energy development, and job creation.

Emphasis added.

* From the governor’s office…

Since its inception in 2019, the Data Center Tax Credit Program has supported 27 projects across Illinois, helping attract major investment and positioning the state as a leading data center hub.

However, the energy landscape has changed significantly over the past two years.

The Governor believes responsible governance means reassessing major incentives when conditions change — particularly when electricity demand and affordability are at stake. This is about smart growth, not stopping growth. Illinois remains open for business, but the state must ensure incentive programs align with protecting consumers, maintaining a reliable power grid, and ensuring long-term fiscal sustainability and fair allocation of energy resources.

Notice his office’s statement did leave an opening to discuss a way forward. That labor coalition is mighty powerful in the General Assembly. But legislators are undoubtedly getting an earful from constituents about this whole data center issue. A compromise would seem to be in order.