Data center bans in states electing Democrat governors could push jobs, investment elsewhere 

States that elected a Democrat to the executive mansion led the charge in restricting data center development via ballot initiatives in the 2026 midterms, according to an analysis by Heartlander News – measures that supporters warn could push jobs and billion-dollar projects to other states.

Of the 46 successful initiatives voters approved that either banned or restricted data center construction, 21 came in Ohio, seven in Illinois, eight in Maine, two in New Jersey and one each in California, Nevada and Wisconsin, all states where Democrats occupy the governor’s mansion or won the 2026 gubernatorial race.

Four anti-data center initiatives passed in Kansas, where the governor’s race hasn’t been called, but a Democrat is currently ahead.

Edgewater, Florida, a coastal tourism destination, banned the development of data centers in the town of 23,097, even as the state elected Republican Byron Donalds governor.

Only tiny Harwood, North Dakota, with a population of 800, rejected a ballot issue slowing construction of data centers.

In September, Democrat Amy Acton, now the governor-elect, called for a moratorium on data centers while campaigning for the top job in Ohio, a state that seems to be the center of gravity in the anti-data center movement.

After the election, Acton told WHIO-TV 7 she wanted “good paying, union jobs in our state.”

“Those jobs are not very permanent because once those centers are up and operating, those jobs go away,” she said about data centers.

Acton was likely influenced by studies such as one authored by a Miami University professor in Ohio that showed that, after construction jobs ended, new data centers created “1,000 to 1,300 jobs in the counties where they are located, on average … in industries that support data centers, not in restaurants or shops.”

The authors said those jobs were created slowly over a three-to-five-year period.

The study also noted that there were $156 billion worth of canceled or delayed projects in 2025 alone because of the pushback against data centers.

“Our findings do show that data centers can create jobs beyond the small number of people working inside their walls,” the authors said. “But that does not mean every one of them is a good deal for their local community.”

Opposition centers on resource use and utility costs

Opposition has centered on resource use, especially increased electricity consumption and who is going to pay for it.

“Utilities are building infrastructure, and then we all pay for it because that’s how the utility business model has always worked,” Ari Peskoe, director of Harvard Law School’s Electricity Law Initiative, told Consumer Reports in March about the data center fight.

Some Democrats have likened incentives for data center construction to corruption.

“This election was about costs and corruption,” Larry Huynh, a Democratic consultant who works on AI issues, told Newsweek. “Data center builders got tax breaks, money in their pocket, to build these things while at the same time voters were paying higher electric bills, having issues accessing water, and seeing their utility costs go up.”

Tax incentives were offered to data centers in 22 states controlled by Republican governors, versus 16 controlled by Democrat governors in 2026, according to a tally by the National Conference of State Legislatures analyzed by Heartlander News.

Texas, Virginia, Illinois and Pennsylvania offered some of the top incentives.

Industry warns restrictions could send projects elsewhere

Supporters of data centers, such as the Associated Builders and Contractors (ABC) of Ohio, are warning that local opposition embodied in moratoriums and restrictions will just push projects to other localities, denying citizens good jobs.

“ABC members consistently report that capital is highly mobile,” ABC wrote in June in testimony to the Ohio Select Committee on Data Centers. “Even relatively short delays or shifts toward more restrictive or unpredictable regulations can cause developers to move billion-dollar projects to other states.” 

In fact, members of the Trump administration have suggested that, while they want to be sensitive to resource concerns, they would be willing to use federal property to house data centers.

Trump himself said that opposition to data centers only benefits China.

“The only reason that communities throughout the U.S.A. should not want Data Centers is if they want to end up being backwards and poor,” he wrote on Truth Social.

Market and economic concerns add to debate

The stock market saw a broad selloff last week, losing more than 4% of its value, or nearly $2.6 trillion, largely because of the rapid dumping of AI and data center stocks following the elections, according to NBC News.

“Today is the cold shower that I anticipated might occur after a blue-wave situation,” Ed Yardeni, president of Yardeni Research, told NBC about the Democrat victory in the congressional races.

In September, Heartlander News reported that nonresidential fixed investment was one of the strongest components of gross domestic product (GDP) in 2026, largely because of data center construction.

“Most of the strength in investment appears to be connected to building the infrastructure necessary to support AI services,” the Federal Reserve said earlier in the year.

John C. Williams, president of the Federal Reserve Bank of New York, said in September that he worried AI-related inflation would affect the larger economy.

“In particular, the inflationary impact of the AI-related demand shock is increasingly salient, and I now expect somewhat larger and longer-lasting effects from energy prices on inflation,” he said.

But perhaps he won’t have to worry as much anymore.

A number of economists who spoke with CBS News warned that moratoriums on AI could be harmful to the economy and the broader stock market, which feeds GDP.

A 20% correction in the stock market would be a significant blow, said one economist.

“That would be a 1% hit to GDP,” said Capital Economics chief North America economist Stephen Brown.