The National Taxpayers Union released a comprehensive analysis on June 24, 2026, addressing 15 widespread misconceptions about data centers and their impact on communities. The report, authored by Jess Ward and Leah Vukmir, argues that elected officials nationwide are grappling with debates over artificial intelligence infrastructure, electricity demand, water use, tax incentives, and land development—often driven by misunderstandings rather than facts. The authors present what they call a "taxpayer-friendly approach" grounded in fiscal responsibility, asking whether taxpayers will come out ahead, whether ratepayers will be protected, whether infrastructure costs will be transparent, and whether projects will strengthen the local tax base.

The report tackles head-on the claim that data centers drain excessive water resources, noting that total water usage for farm use in California is estimated to be 478 times as much as data centers, while forestry and mining also consume much greater supplies of water. On energy costs, the analysis states that average electricity prices are essentially identical between states with many data centers and those with few. The report emphasizes that newer data centers are increasingly likely to use recycled water, closed-loop systems, or even air for cooling purposes. Regarding employment, the authors note that data center construction creates well-paying jobs for electricians, plumbers, and installers, while ongoing operations require maintenance personnel, engineers, and contractors to upgrade and replace equipment at a faster rate than most other industries.

According to the report, data centers generate substantial local tax revenue while placing little strain on schools, emergency rooms, and other public services—and frequently contribute to roads, water infrastructure, broadband, and workforce partnerships with local colleges and trade schools. The authors write that data centers have become more energy efficient over the 20-plus years they've existed, which makes sense since energy is a big cost for any industrial site. The report finds that businesses looking to build new data centers recognize electricity will be their biggest expense and have a strong incentive to either build in areas with sufficient energy capacity or partner on building infrastructure to supply new capacity. The analysis warns that blanket opposition to data centers can deprive taxpayers of a growing commercial tax base and cedes critical digital infrastructure to other countries.

The authors explain that grid challenges existed long before the AI boom, with utilities often disincentivized to upgrade their grids while private investment has been slowed by sluggish permitting processes and bureaucratic resistance. Data center growth is simply bringing out into the open an overdue policy discussion about expanding capacity and with it America's technological leadership, the report states. To win the race with foreign competitors, data center builders are teaming up with policymakers and utilities to fund their own "behind the meter" power plants or pay for upgrades to existing infrastructure. The enhanced capacity that data centers provide can result in net energy benefits to other ratepayers by stabilizing or lowering their bills over the long term, according to the analysis. The report emphasizes that data centers function as the railroads, ports, and industrial parks of the digital economy—without them, digital commerce, remote work, distance learning, and cybersecurity wouldn't be possible.

The National Taxpayers Union concludes that AI infrastructure demand is expected to grow for years, not months, and that communities enacting bans or long moratoriums risk falling behind economically and technologically. The authors argue that economic growth and grid reliability aren't mutually exclusive, and that good policy at the federal, state, and local levels can boost energy production, modernize transmission, rationalize permitting, and deploy new technologies while protecting residential ratepayers. Public officials at every level can exercise leadership now to ensure the AI revolution is led by Americans, for Americans—but decisions should be based on facts, not myths.