To Texas Railroad Commissioner Wayne Christian, the debate over data centers starts with the boom in capital investment and property tax revenue the developments promise to the state.
Creating regulatory guardrails on issues such as water usage and power are necessary but shouldn’t risk the potential return, Christian told the Fort Worth Report after appearing on a data centers panel Sept. 26 at the Texas Tribune’s annual TribFest conference in Austin.
“I think you can learn from previous problems from data centers that have shown problems in the past,” said Christian, who doesn’t regulate data centers but has increasingly spoken on related questions about natural resources. “And what you do as an educated public is you fix the problems, you regulate to make sure it doesn’t happen again. But you don’t stop and turn down billions, billions of free market dollars.”
Data centers — and their massive potential economic return — have careened into the intersection of the free market and community concerns about their environmental impact. The Texas Legislature is set to take up the debate over regulation in the 2027 session.
The accompanying statistics highlight the choices and problems data center developers and operators face. Demand nationally for development of data centers — the buildings that house the digital infrastructure necessary for processing daily transactions worldwide for everything from paying water bills to buying airline tickets — is surging, according to research by the JLL commercial real estate firm.
Seventy-nine percent of Americans support U.S. leadership in artificial intelligence, but only 14 percent support “data centers in our community,” according to research by JLL, Gallup and Reuters published by JLL in August. JLL declined a request by the Report for an interview for this story.
Communities are experiencing the conundrum. In Fort Worth, property tax revenue makes up about 60% of the city’s general fund budget, which pays for most basic city services. But residential revenue — 63% of the tax base, compared to commercial — has turned soft in recent years because of protests and litigation, plus the Tarrant Appraisal District’s policy of reappraising every two years. Fort Worth struggled to close a $94 million budget shortfall for 2027 as a result.
The city estimated this spring it received $83 million in gross property tax revenue from four data centers in the city over the last five years. In 2024, Fort Worth’s property tax revenue from data centers equaled the same revenue from 8,378 average-valued single family homes, the city estimated.
“That’s a huge impact to a school district as well,” Jesica McEachern, an assistant city manager, told council members June 2 in presenting a report on proposed regulation.
By 2030, including the existing data centers and phases of planned facilities the city projects will launch by then, the proportion of property tax taken up by commercial property could move more toward half, driven by the hubs, she estimated.
It would take an estimated 22,718 average-valued single family homes in fiscal 2031 to generate the same projected property tax as data centers for that year, she added.
In 2024, Fort Worth’s property tax revenue from data centers equaled the same revenue from 8,378 average-valued single family homes, the city estimated. (Courtesy | Greater Fort Worth Association of Realtors)
McEachern maintained the economic benefit of data centers isn’t the “decision point” on whether to accept them. City officials have debated water, power, noise, land use, neighborhood encroachment, setbacks and other questions.
Christian takes another view on the matter of decision points. Capital investment by investors in Texas artificial intelligence and data center projects now rivals investments in oil and gas, he noted. Some cities are now actively recruiting data center development.
“Now, digest that total amount of money,” Christian said. “What that would do for future generations, for Texas, and for opportunities in half the state that’s literally dying. Here’s opportunities for families to have money, businesses, opportunities for the American dream to be expanded.”
Looking ahead to what the Legislature may decide, Fort Worth City Council members in August unanimously approved the first move toward implementing a 90-day moratorium on the construction of data centers.
Councilmembers Michael Crain, left, and Charlie Lauersdorf listen to speakers during a City Council meeting Aug. 11, 2026, in Fort Worth. (Christine Vo | Fort Worth Report)
Council members have struggled with the issue as throngs of residents have shown up at meetings to protest data center development.
“Data centers can add significantly to the tax base, even if they create fewer permanent jobs than some other uses,” council member Michael Crain told the Report this week.
“That’s why we need to evaluate each proposal on its merits — its long-term tax revenue, jobs, infrastructure demands and impact on nearby neighborhoods — and determine whether it’s the right fit for our community.”
Data center developers and operators have descended on Texas, which has now overtaken Virginia as the nation’s top state for such projects, because of its business-friendly approach, low energy cost, faster permitting, incentives and abundance of land close to power infrastructure, Fort Worth city staff told council members at the June 2 meeting.
Fort Worth council member Macy Hill during a FY 2027 budget work session meeting on May 12, 2026. (Maria Crane | Fort Worth Report/CatchLight Local/Report for America)
Such projects also have low impact on city services and infrastructure, the staff said. After the staff presented the property tax comparison of data centers to single-family homes at the meeting, council member Macy Hill asked for information on the costs of providing infrastructure to homes compared to data centers.
Whether to offer economic incentives, as the city often does in cases where major investment is being offered, has quickly become a flashpoint.
“These are not desirable land uses,” council member Elizabeth Beck said at the meeting. “I think what makes them desirable is their tax base. So by giving that up to get them I think is a ridiculous policy. If they’re so needed, then they’ll come. And if they’re so needed and they need an incentive, they can go somewhere else.”
Councilmember Elizabeth Beck speaks during a City Council meeting Aug. 11, 2026, in Fort Worth. (Christine Vo | Fort Worth Report)
Industry estimates on data center valuations for property tax purposes are significantly higher than for other potential commercial land uses. The valuation for a data center can, for example, range 7 to 10 times higher than that for a distribution center, according to industry estimates.
Demand for data center space is projected to remain strong, with leases being signed now for occupancy in 2028, according to the JLL research.
As a result, occupancy is expected to remain strong, with vacancy at an estimated 1% today, compared to 5% in 2018, according to JLL. Building developers and landlords are able to focus on the best risks in prospective tenants, according to JLL.
Congressman Jake Ellzey, Deputy Energy Secretary James Danly, Gov. Greg Abbott, Google CEO Sundar Pichai, and Google senior director Amanda Peterson Corio meet in Midlothian in 2025 to announce Google’s Texas investment plans. (Courtesy | Google)
An estimated 59% of demand is coming from “hyperscalers” like Google, major tech concerns with the capital and creditworthiness to get their proposed projects done, according to JLL.
Google in November 2025 announced it planned to invest $40 billion in Texas through 2027. That would go toward building cloud and AI infrastructure and data centers in Armstrong and Haskell counties, which are located in the Panhandle and West Texas.
Google said it was launching a $30 million “energy impact fund” for various initiatives, “along with more than 6,200 megawatts of new energy generation and capacity contracted to date through power purchase agreements with energy developers.”
In Haskell County, Google said it planned to build “alongside a new solar and battery storage plant.”
The company also said it planned to help develop the labor force through a partnership, training “existing electrical workers and more than 1,700 apprentices in Texas by 2030, more than doubling the projected pipeline of new electricians in the state.”
“Our latest investment in Texas is designed to not only support Texas’ workforce and infrastructure, but to ensure the U.S. retains the technical backbone to lead the world in AI,” the company said.
Supporters of data centers attribute the industry’s problem with perception to “bad actors.” They “have ignored the local population,” Texas Railroad Commissioner Wayne Christian (pictured here in 2022) said. “That abuse has happened.” (Fort Worth Report archive photo)
Supporters of data centers attribute the industry’s problem with perception to “bad actors.”
“The bad actors have ignored the local population,” Christian said. “That abuse has happened.”
But, he added, “almost every situation where these data centers have gone in, you see the economies benefit, the tax bases benefit,” he said.
“The local people have their local taxes able to go down. You see more electricity generated in many of these facilities that they bring in their own generation, and there’s more positives than negatives, and we should learn from the negatives and learn how they did the positives and just implement them.”
Scott Nishimura is senior editor for local government accountability at the Fort Worth Report. Reach him at scott.nishimura@fortworthreport.org.
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