AUSTIN, Texas — Texas officials are intensifying scrutiny of the rapidly expanding data center industry, with a coalition of state and local leaders calling for stronger oversight and a temporary pause on new developments as industry representatives gather in Austin for a national convention focused on data center growth.
The push is being led by Vikki Goodwin, Texas House Representative for District 47 and nominee for lieutenant governor, who is hosting a press conference alongside elected officials and political candidates on the opening day of the PowerUp Data Centers industry convention. The event aims to highlight concerns about the impact of data centers on water resources, electricity demand, land use, and community infrastructure.
The discussion comes as Texas continues to emerge as one of the nation’s leading markets for data center development. The state’s favorable business climate, growing energy infrastructure, and tax incentives have attracted substantial investment from technology and digital infrastructure companies seeking to expand capacity for cloud computing, artificial intelligence, and other data-intensive services.
Goodwin said the state should halt new data center construction until lawmakers establish comprehensive regulations governing the sector.
“Texans are overwhelmingly concerned about the impact of data centers on our water, land, health, and access to electricity.” says Representative Goodwin. “Our communities deserve real transparency and accountability from facilities that already exist or are under construction. We must have a moratorium on new data center construction until we can pass comprehensive legislation that puts the resource use of people and animals before the resource use of these massive facilities.”
The press conference features a broad group of public officials and candidates, including State Senator Sarah Eckhardt, Hays County Commissioner Michelle Gutierrez Cohen, Austin City Council Member Zohaib “Zo” Qadri, San Marcos City Council Members Alyssa Garza and Amanda Rodriguez, and Democratic nominee for Agriculture Commissioner Clayton Tucker.
A key issue raised by participants is the role local governments should play in overseeing large-scale data center projects. Officials argue that communities directly affected by new developments should have greater authority to manage their impacts and make decisions that reflect local priorities.
San Marcos City Council Member Alyssa Garza said local governments need stronger protections against state-level policies that could override community decisions.
“If local governments are expected to manage the impacts data centers have on water, energy, and quality of life, they deserve both the authority and the certainty that the decisions they make in partnership with their communities won’t be swept aside by state preemption,” says San Marcos City Council Member Garza. “State leaders should empower, not undermine, local officials who are doing the hard work of balancing economic opportunity with the long-term health and sustainability of the communities they were elected to serve.”
The debate reflects growing attention on the resource demands of modern data centers, which require significant amounts of electricity and, in some cases, water for cooling operations. As artificial intelligence applications and cloud services continue to expand, demand for new data center capacity has increased substantially across the United States.
According to information provided by organizers, Texas currently has more than 330 operating data centers and more than 245 additional facilities planned as of July 2026, making it the fastest-growing data center market in the country.
Industry growth has been supported in part by a sales tax exemption program for data centers that was signed into law by former Governor Rick Perry in 2013. The incentive program was designed to attract investment and encourage infrastructure development across the state.
However, critics of the program argue that the financial cost to taxpayers has increased sharply as the industry expands. Data cited from the Texas Comptroller’s office indicates that the value of the tax exemption grew from $148.8 million in forgone revenue during 2024 to approximately $1.02 billion in 2025. The office projects that the cost of the program could rise by another 33% over the next five years.
Supporters of the incentives contend that data centers create jobs, attract technology investment, and strengthen Texas’ position as a national hub for digital infrastructure. Opponents, meanwhile, argue that the pace of development warrants additional safeguards to ensure that local communities, natural resources, and public utilities are protected.
As industry executives, investors, and energy stakeholders meet in Austin, the discussion surrounding data center growth is expected to remain a prominent policy issue. The calls for a moratorium and greater local control underscore a broader debate over how Texas should balance economic development opportunities with long-term resource management and community concerns.
