A bill to repeal $250 million in unused tax incentives for AI data centers moved another step toward final passage Sunday after the Assembly Budget Committee unanimously approved the measure, reflecting growing bipartisan concern over an industry that has become a political hot potato as proposed facilities face fierce opposition from residents in host communities.
The End Data Center Tax Credits Act (A5165), sponsored by freshman Assemblyman Andrew Macurdy (D-Summit) and Assemblyman Balvir Singh (D-Burlington), would return the $250 million in unused tax credits to the New Jersey Economic Development Authority.
The legislation comes as data center development has become an increasingly contentious issue across New Jersey, with residents and local officials raising concerns about noise, energy consumption, and environmental impacts.
In Vineland, residents have complained of the persistent humming noise they attribute to a nearby data center. In Andover, local opposition helped derail a proposed facility after the borough council voted to reject the project.
The growing backlash has helped build bipartisan support for scrapping the tax incentives and redirecting the unused funds to the Economic Development Authority for other economic development initiatives.
Gov. Mikie Sherrill has also proposed new guardrails for AI data center development as lawmakers continue to scrutinize the industry’s rapid expansion.
The bill cleared the Assembly State and Local Government Committee on June 23 and the Senate Budget and Appropriations Committee on June 24. Sunday’s vote by the Assembly Budget Committee gives the measure approval from both budget panels as lawmakers work toward the June 30 budget deadline.
The bills received bipartisan support in both houses.
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