NEVADA DEMOCRATS SCRAMBLE FOR COVER AS DATA-CENTER SUBSIDY MESS BOILS OVER

Nevada Democrats have finally discovered that the state’s data-center subsidy system is a political liability. Now they are scrambling to decide who should take the blame.

Rep. Dina Titus recently asked Gov. Joe Lombardo to halt state tax abatements for data-center projects proposed on federal land until the Nevada Legislature reconvenes in 2027. She cited concerns about water, extreme heat and grid reliability surrounding the proposed Townsite Solar 2 project near Boulder City.

But Titus’s eleventh-hour request is hardly a statewide crackdown.

It would pause only certain abatements involving projects on federal land. It would not repeal Nevada’s broader incentive program, claw back existing subsidies or halt projects proposed on private or other nonfederal property. It also comes after Nevada approved approximately $457 million in projected data-center tax abatements.

Titus is not dismantling Nevada’s data-center subsidy system. She is asking Lombardo to temporarily close one door after the state has already approved hundreds of millions of dollars in projected tax breaks through the others.

Her July 23 letter nevertheless creates an uncomfortable problem for fellow Democrat Teresa Benitez-Thompson, the party’s nominee in Nevada’s open 2nd Congressional District.

Benitez-Thompson now says Nevada needs to “call a timeout” on data centers and reconsider the “sweetheart deal” the industry receives.

There is just one problem: She voted for it.

TBT Voted For The Tax Breaks

In 2015, Benitez-Thompson voted for Senate Bill 170, which created sweeping sales, use and personal-property-tax abatements for qualifying data centers and colocated businesses.

The law allowed qualifying companies to reduce their sales and use tax rate to 2 percent and receive a 75 percent abatement on personal-property taxes for as long as 20 years.

The official Assembly journal shows the measure passed 36-6. Benitez-Thompson was not among the six lawmakers who voted against it.

She was not walking into the vote blind.

During an April 2015 Assembly Taxation Committee hearing, Benitez-Thompson questioned why Nevada needed to offer additional abatements when the state already lacked a corporate income tax. She also warned that much of the information underlying the agreements would remain outside public view.

“Ultimately I, as a legislator, will never know what that materializes into,” Benitez-Thompson said during the hearing.

She raised the transparency problem, recognized the extraordinary length of the abatements and voted for the bill anyway.

That decision is particularly difficult to explain now. A March investigation by The Nevada Independent found that the state provides only limited public information about whether data centers have fulfilled their economic promises. Of 13 projects with active abatements, only three had completed publicly reported audits as of January 2025.

The state tracks certain requirements, including jobs, wages and capital expenditures, but does not track whether companies met their projected tax-revenue or overall economic-output promises. Public-records experts also questioned whether the state gives companies too much authority to keep audits from public view.

Benitez-Thompson saw the transparency hole before lawmakers opened it. Then she helped open it.

The Aaron Ford Connection

The subsidy program also runs straight through Nevada’s Democratic establishment.

Attorney General Aaron Ford was one of four state senators who sponsored SB 170. Benitez-Thompson now serves as Ford’s chief of staff while he runs for governor.

That history went unmentioned in Titus’s announcement. Her letter directed every question toward Lombardo, including whether his administration would refrain from approving abatements for projects on Bureau of Land Management property.

Titus did not mention that Ford helped sponsor the underlying law. She did not mention that Ford’s chief of staff voted for it. She did not ask either Democrat to explain why the program they supported now requires an emergency pause.

Instead, Titus arrived more than a decade later, narrowed her request to federal land and attempted to leave Lombardo holding the entire political bag.

That may be convenient in an election year. It is not accountability.

$457 Million For Roughly 300 Promised Jobs

The price tag makes the Democrats’ sudden change of heart easier to understand.

Nevada has approved approximately $457 million in projected data-center abatements tied to promises of roughly 300 permanent jobs, according to a Nevada Independent analysis. That works out to approximately $1.5 million in projected incentives for every promised permanent position.

From fiscal years 2017 through 2025, the abatements also produced a gross reduction of more than $537 million in local-government sales and use tax collections compared with what could have been collected if the companies had operated without the incentives.

The analysis cautioned that the figure does not mean local governments necessarily would have collected every dollar if the abatements had never existed. Supporters argue that the incentives attracted investment that otherwise might have gone to competing states.

Data centers have also produced substantial construction work. Northern Nevada union leaders credit the industry with millions of work hours for electricians, plumbers and other tradesmen. A separate 2023 study found that Nevada data centers, including facilities that did not receive abatements, supported 4,550 jobs and generated $290 million in state and local tax revenue.

But the permanent-job numbers remain small compared with the size of the incentives, and the state lacks complete information needed to determine whether every project delivered the promised return.

That is the system Titus now wants to pause in limited circumstances and Benitez-Thompson now wants voters to believe she opposed all along.

Campaign Money Followed

Nevada campaign-finance records add another layer to Benitez-Thompson’s reversal.

A review of her state filings found that her campaigns accepted at least $9,000 from Switch-related interests, lobbyists and companies involved in the data-center tax-break debate. Her campaigns also received $23,000, as filed, from NV Energy, Nevada Power and Sierra Pacific Power between 2010 and 2020.

Those contributions do not establish a quid pro quo. They do, however, sharpen the contradiction: Benitez-Thompson voted for the subsidy framework, accepted campaign support from interests connected to the industry and Nevada’s dominant utility, and became a vocal critic only after the data-center boom became politically toxic.

The “AI Changed Everything” Defense

Benitez-Thompson argues that the industry Nevada subsidized in 2015 is not the same industry voters are confronting in 2026.

“I don’t think anyone in 2015 was anticipating AI to be where it is right now,” she told The Nevada Independent.

She said the state was still recovering from the Great Recession when lawmakers created the abatements, while today’s market gives data-center companies incentives that did not exist a decade ago. She now says data centers should pay their own way and that the remaining abatements should be reconsidered.

The artificial-intelligence boom has unquestionably transformed the scale and resource demands of data centers. But it does not erase Benitez-Thompson’s vote.

Lawmakers knew in 2015 that the program could grant decades of tax relief. They knew the agreements would involve limited transparency. They knew the industry required enormous amounts of equipment and electricity. Benitez-Thompson personally raised some of those concerns before choosing to support the bill.

Her defense explains why Nevada should revisit the policy. It does not explain why Northern Nevada voters should trust her to clean up a subsidy system she helped create.

Democrats Point Fingers As The Bill Comes Due

Titus’s request and Benitez-Thompson’s campaign rhetoric show that Nevada Democrats understand the politics have shifted.

Titus wants a narrow moratorium aimed at federal land and wants Lombardo to answer for it. Benitez-Thompson wants a broader “timeout” but has not detailed which abatements she would repeal, whether she supports Titus’s proposal or how she would unwind the program she supported. Ford, one of the original sponsors, is running for governor while his chief of staff campaigns for Congress as a critic of the industry’s tax treatment.

The disagreement is no longer over whether Nevada’s data-center policy has become politically dangerous. It is over how much of it to pause, who must act and which Democrat can escape the record first.

Titus wants voters to forget how late she arrived. Benitez-Thompson wants them to forget she helped create the program. Ford would presumably prefer that voters forget his name was on the bill.

After a decade of subsidies and hundreds of millions in projected abatements, Nevada Democrats are not offering accountability. They are pointing fingers and hoping someone else gets stuck with the bill.

 

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