Data Center Tax Breaks in Cook County Face Reform Before 2027

Two counties, two outcomes

The argument over AI data centers usually turns on electricity. A Chicago Tribune editorial from late August turned it toward property taxes instead, and the change matters for how communities think about the costs and benefits of the AI buildout. The board compared two places. One is Loudoun County, Virginia, which has more than 250 data centers, expects about $1.3 billion in industry tax revenue next year and has seen residential property tax bills fall by roughly 30% over a decade. The other is Cook County, Illinois, which has just over 100 facilities, and where homeowners in some data-center towns are paying more, not less.21

Northlake, a western suburb, is the editorial's main example. It hosts Illinois' largest data center, yet its total residential property tax bill rose 13.3% in tax year 2025, according to Cook County Treasurer Maria Pappas.21 A joint analysis by the Tribune and the Illinois Answers Project estimated that the average Northlake homeowner would save more than $2,000 a year, close to 30%, if local data centers had not received valuation cuts and incentives.21 Across the county, the same reporting found nearly $100 million in combined savings for data centers from county incentives and from lower assessments won on appeal.21

Much of this comes back to one program. Cook County's Class 6b is a decades-old industrial incentive that cuts assessments over 12 years, and data centers have been allowed to qualify for it.21 The county's own analysis found that its incentives remove 11% of commercial and industrial property value from the tax rolls.24 Class 6b and several related programs expire at the end of 2027 unless the County Board renews them, which sets a clear deadline for reform.21 The editorial also noted that Gov. JB Pritzker announced a pause on new state tax-incentive deals for data centers in June.21

The Loudoun model and its limits

Industry-aligned groups agree that data centers can lower homeowner taxes. Where they differ from the Tribune is on why Cook County has fallen short. A 2026 report by Mangum Economics for the Northern Virginia Technology Council estimated that Loudoun would have to raise its residential rate from $0.805 to $1.537 per $100 of assessed value without data center revenue. That is a 91% increase, or about $5,800 a year on a home near the county median.26 NetChoice says the revenue has let Loudoun cut its residential rate every year for a decade.29 A Washington Examiner opinion piece adds smaller examples, including Quincy, Washington, and Columbia County, Georgia.27

The same analysis that cites the Loudoun numbers includes caveats that the more enthusiastic coverage tends to leave out. A lower tax rate does not guarantee a lower bill when home values are rising. Relying on one industry for revenue creates concentration risk. And fiscal benefits do nothing about the demands these facilities place on land, water and power.26

Illinois' data center lobby wrote back to the Tribune with a different account. Its letter said data centers in Elk Grove Village pay four to six times more in property taxes than typical industrial users, that DeKalb has cut its effective tax rate because of data center revenue, and that the real problem is Cook County's unpredictable assessment system, not the industry.23 The National Taxpayers Union pushes further, arguing that tangible personal property taxes overvalue servers that are often obsolete within three years. In its view, data centers are taxed unfairly, not under-taxed.30

On the evidence, the Tribune has the better argument. Loudoun works because data centers there pay a large share of the bill, including heavy taxes on equipment.2629 Cook County has done the reverse by giving a fast-growing, well-funded industry a subsidy built for factories. The lobby's point about assessment instability may be fair. But it does not explain why Northlake homeowners would see their bills drop by nearly a third if the incentives went away.21

The electricity bill is the bigger fight

Property taxes are only part of what residents pay. The Tribune's demand that data centers "lower, not raise" household costs applies even more to power bills. Lawrence Berkeley National Laboratory now projects that data centers could use 11.8% of U.S. electricity by 2030, and as much as 15.3% in some scenarios.3 The Electric Power Research Institute puts the 2030 range at 9% to 17%.2 Globally, the International Energy Agency expects data center consumption to roughly double from 2025 to 2030.7

How much of that reaches household bills is still disputed. PJM's independent market monitor estimates that data centers have cost the grid's 67 million customers about $29 billion over roughly two years.6 Separate coverage reports that the operator tied 63% of a capacity-price jump from $28.92 to $329.17 per megawatt-day to data center demand.5 A fact-check, however, warns that wholesale capacity costs are only one part of a retail bill, and that the market monitor put data centers' share of wholesale costs at around 9% through July 2026.4 An industry-funded E3 paper found no clear national link to higher residential rates, while other analyses reached the opposite conclusion.1 One academic study of about 1,200 service areas found that each added data center raises residential prices by about 0.182 cents per kilowatt-hour, with almost no effect at nonprofit utilities.8

The most defensible reading is that the effect is real but concentrated, and that it depends on who regulators decide should pay. Politicians are acting on that. The House passed the Ratepayer Protection Act 417-3 in September. It would let state regulators require facilities of 100 megawatts or more to pay for the generation and transmission built to serve them.9 The Senate had not acted as of early October, and Sen. Martin Heinrich has argued that the bill does not go far enough.10 States including Oregon and South Dakota have already created separate cost rules for large loads.2

Nuclear as a public-relations strategy

This is where nuclear power comes in. Gallup polling found that 71% of Americans oppose a local AI data center, compared with 53% who oppose a local nuclear plant.15 The Tribune itself pointed out that more people would now accept a reactor nearby than a server farm.24 Tech companies appear to be using that gap.

Google's October agreement with Constellation Energy is the clearest example. The 20-year contract supports $4.3 billion in upgrades that will add 890 megawatts at 11 reactors across six sites in Illinois, Pennsylvania and New Jersey. A separate 15-year deal covers 2,700 megawatts from existing plants.11 Google says it is covering Constellation's costs for the new capacity, transmission upgrades and operations, which it says might otherwise land on local ratepayers.20 The companies described the deal as a direct response to PJM's "bring your own power" proposal.17 About $2 billion of the investment will go to Illinois plants including Byron, Braidwood, LaSalle and Quad Cities, according to an Illinois state senator.20 That means part of Google's answer to grid strain is being built in the same state that is now reconsidering its data center tax breaks.

Oracle is taking a similar approach in Wisconsin. It has offered to buy 125 to 250 megawatts from the Point Beach nuclear plant, a contract that has been raising costs for We Energies customers. Oracle says the purchase could save those customers $300 million in fuel costs between 2027 and 2033.13 The state's main consumer advocate called it a step in the right direction but said the details will decide whether customers actually benefit.13

The nuclear option has limits. Roughly 8.5 gigawatts of existing U.S. reactor output is now under contract to hyperscalers, but only one new reactor tied to data centers is actually under construction: Kairos' 50-megawatt Hermes 2 in Tennessee.15 For the rest of this decade, nuclear's contribution will come mostly from uprates and restarts of existing plants. These are useful, but they are small compared with forecasts that U.S. data center IT load could nearly double by 2028.515

The takeaway

The Tribune editorial, the ratepayer bills in Congress and the nuclear contracts all point to the same principle: data centers should pay for what they use. Loudoun shows what happens when that principle shapes the tax base. Google's uprate deal shows a version of it on the power side. Northlake shows what happens when it does not. With Class 6b set to expire, Cook County has a clear chance to align its tax policy with what both the industry and its critics now say they accept.2120