Windsor, CT – At a press conference held in a downtown restaurant bar, Republican state Senate candidate Ryan Fazio used a local example to push for reform of Connecticut’s data‑center tax incentive program. The program, enacted in 2021 under Gov. Ned Lamont, offered a sales‑tax rebate that Cigna used to save an estimated $17 million on a $386 million data‑center expansion in Windsor.
Fazio’s criticism of the special tax benefit
Fazio, the ranking Republican on the legislature’s Energy and Technology Committee, said the rebate represents “unfairness and unaffordability” for taxpayers. He emphasized that the incentive was a “special tax subsidy for a data center paid for by you, the taxpayer.” While not calling for a blanket ban on data centers, he urged the legislature to end the special tax benefit, require data‑center operators to bring their own power to the grid, and install “guardrails” to protect ratepayers.
Context of the 2021 law
The 2021 law was designed before the rapid rise of artificial‑intelligence‑driven “hyperscale” data centers. At the time, it targeted smaller facilities that could support biotech and insurance companies. The legislation authorized the Department of Economic and Community Development (DECD) to negotiate tax‑incentive agreements with “qualified data centers” for 20‑ or 30‑year terms, provided the projects invested at least $50 million in enterprise or opportunity zones, or $200 million elsewhere. It also exempted the improvements from property tax while allowing host communities to negotiate offsetting fees.
Local impact and broader debate
Fazio framed the issue as a matter of fairness for Connecticut families and small businesses. “When you give one dollar to a large corporation, that tax relief comes at the expense of everybody else,” he said. He contrasted the data‑center subsidy with the lack of comparable relief for small businesses that also create jobs.
State leaders noted that many other states waive sales taxes on computer‑hardware equipment for data centers and some even offer electricity‑cost incentives—benefits Connecticut does not provide. Senator James Maroney, the legislature’s A.I. expert, defended the original intent, saying the law pre‑dated today’s hyperscale facilities and was meant to attract biotech‑related data centers.
National backdrop
The controversy echoes a national conversation about data‑center growth, AI infrastructure, and electricity demand. President Donald Trump recently posted on Truth Social that communities should welcome data centers to spur jobs and lower taxes. The National Republican Senatorial Committee also highlighted data‑center politics in Ohio, where former Sen. Sherrod Brown is using the issue against Sen. Jon Husted.
What’s next?
Fazio’s call for reform adds pressure on the state legislature as it prepares its next budget cycle. He argues that any future tax incentives should be transparent, limited in scope, and tied to tangible benefits for Connecticut taxpayers. The debate is likely to continue as the state balances the promise of high‑tech jobs with the need to keep electricity rates affordable for families.
For now, the Windsor data‑center rebate remains a flashpoint in the broader discussion of how Connecticut should attract technology investment without burdening its residents.
Original reporting: The Connecticut Mirror — read the source article.
