Maggie Hill, left, of Wimberley, and Texas Agriculture Commissioner Sid Miller join people on the South Steps of the Texas Capitol to protest data center expansion before a Texas Senate Committee on Finance hearing in Austin, Monday, July 27, 2026.
Jay Janner/Austin American-Statesman
Sen. Joan Huffman, R-Houston, listens during a Texas Senate Committee on Finance hearing on data center investment and state fiscal effects at the Capitol in Austin, Monday, July 27, 2026.
Jay Janner/Austin American-Statesman
People gather on the South Steps of the Texas Capitol to protest data center expansion before a Texas Senate Committee on Finance hearing in Austin, Monday, July 27, 2026.
Jay Janner/Austin American-Statesman
Rita Beving, of Dallas, protests data center expansion at a rally at the Capitol before a Texas Senate Committee on Finance hearing in Austin, Monday, July 27, 2026.
Jay Janner/Austin American-Statesman
People gather on the South Steps of the Texas Capitol to protest data center expansion before a Texas Senate Committee on Finance hearing in Austin, Monday, July 27, 2026.
Jay Janner/Austin American-Statesman
Kaiba White of Austin makes a sign as people gather on the South Steps of the Texas Capitol to protest data center expansion before a Texas Senate Committee on Finance hearing in Austin, Monday, July 27, 2026.
Jay Janner/Austin American-Statesman
An activist railing in front of the Texas Capitol against anything new near her Central Texas ranch got flustered, warning that China’s Communist Party was infiltrating data centers and renewable energy equipment and suggested the crowd “can Google it.”
She seemed to miss the irony of using a data center to oppose data centers. Texans are uniting around opposition to data centers in their communities, but data centers love Texas.
TOMLINSON’S TAKE: Texas electricity demand keeps breaking records. The added demand of data centers will raise prices.
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Gov. Greg Abbott and his allies have long touted cheap electricity, no corporate income taxes, low state regulation and weak local governments to attract businesses to Texas. In 2013 and 2015, GOP lawmakers took the extra step of exempting data centers from state sales taxes on equipment and electricity.
At Monday’s data center protest at the Capitol, Agriculture Commissioner Sid Miller later took the stage before a coalition of strange bedfellows.
“They love our farmland because it’s flat, it’s clear, there’s water and electricity there, and they can just come in and start building,” he said. “And they don’t really care what the price is.”
Miller has been complaining about data centers for years while Abbott, Lt. Gov. Dan Patrick and House Speaker Dustin Burrow passed incentives to bring them here. Now that Miller’s lost the GOP primary for reelection, he’s slamming Abbott for taking campaign money from data center investors, including $500,000 from Elon Musk.
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“Give the damn money back!” he told the crowd of a couple dozen Republican landowners and Democratic environmentalists. “Return every dime of money you’ve taken from the data center industry and prove to Texas that you’re serious about solving the No. 1 issue in Texas.”
Delay and distract
Under fire, Abbott publicized new data center regulations on Friday from the Public Utility Commission and ERCOT. But his list includes rules that were under development long before he asked for them. Some are half-baked while others are probably unenforceable.
For example, ERCOT’s CEO Pablo Vegas told me in September 2024 that he wanted to require data centers and cryptocurrency miners to cooperate with ERCOT’s control room when demand spiked. The companies were outraged and held off the rules for years. The governor was silent on the proposal until data centers became a political issue.
Abbott’s letter also acknowledged that only the Texas Legislature can give the PUC authority to impose new grid reliability requirements. Yet his demand that data centers “contribute toward meaningfully reducing residential electric bills” not only sounds like socialism but will also probably not hold up in court.
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The governor’s six-month ban on new data centers also conveniently ends after the election but before the Legislature can pass any new laws.
“Basically, he’s just given a wink and a nod to his campaign supporters: Go ahead and do what you need to do. There will be no laws taking effect until September 2027, and you’ll be grandfathered in,” Miller correctly explained.
Of course, that assumes lawmakers pass any laws at all. Lt. Gov. Dan Patrick controls the Texas Senate, and like Abbott, he’s late to the game after enthusiastically supporting data centers.
“Everybody knows Texas leads the nation in many fields, including emerging technologies. This will be no different, and Texas will be No. 1 for AI, data centers, and cryptocurrency,” Patrick told the Daily Wire, a conservative news website, last year. “There is no other state that can even come close to us, and that is our goal.”
$9 billion tax cut for data centers
The Legislature’s twenty-year sales tax exemptions for 59 data centers have so far cost Texans $9.1 billion in lost revenue through 2023, Brad Reynolds, an analyst at the Texas Comptroller’s Office, told lawmakers Monday. They now total over $1 billion a year.
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“From the very start, the scale of these operations was much larger than we understood,” he said.
State Rep. Vikki Goodwin, D-Austin, was at Monday’s protest and has made data center regulation a central plank in her campaign to unseat Patrick. She has called for an immediate special legislative session and a moratorium on new data centers until lawmakers can require them to produce their own power and water supply.
“Texans shouldn’t be asked to subsidize multi-billion-dollar corporations with their tax dollars, higher utility bills, or the water our families and farmers depend on,” Goodwin told a press conference on July 14.
Monday’s protest brought together unlikely allies. Ranchers denouncing data centers took swings at wind and solar energy projects. Landowners opposed to upgrading the state’s electricity lines found common cause with environmentalists protecting water sources.
Cowboy hat-wearing Make America Great Again types mingled with Birkenstock-wearing environmentalists. Though oftentimes, sign-waving activists looked side-eyed when someone at the microphone said something they didn’t agree with.
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After the speeches, protesters went inside for a Senate Finance Committee meeting on tax incentives. The chairwoman, state Sen. Joan Huffman, R-Houston, acknowledged that the sales tax breaks have spun out of control.
“No tax exemption should operate on autopilot,” she said, promising legislation next year.
Abbott and Patrick typically rely on hatred of liberals to win reelection. But hatred for data centers is uniting Texans and starting a political stampede. These folks will not let them get away with cheap talk, half measures or kicking the can down the road.
Award-winning opinion writer Chris Tomlinson writes commentary about money, politics and life in Texas. Sign up for his “Tomlinson’s Take” newsletter at houstonchronicle.com/tomlinsonnewsletter or expressnews.com/tomlinsonnewsletter.