Bond Buyer's coverage counts at least eleven states now weighing legislation to pause new data center construction, per the National Conference of State Legislatures. New York's Responsible Data Center Development Act cleared both chambers in June and now sits on Governor Kathy Hochul's desk. She has ten days to sign it, veto it, or send it back with changes. A signature would make New York the first state with a statewide freeze in effect.
Maine got there first, on paper. Governor Janet Mills vetoed an 18-month moratorium on data centers over 20 megawatts back in April. Her objection was narrow: the bill lacked a carveout for Sentinel Data Centers' $550 million project planned for a former paper mill site in Jay. The House tried to override her veto and fell short, 72 to 65. The moratorium instinct is real. The carveouts are where the fights actually happen.
Texas and Virginia show why legislatures are moving now. Virginia lost more than $1 billion a year in tax revenue to data center incentives between 2023 and 2025, then another $1.6 billion in 2025 alone, according to Moody's Ratings. Texas faces a similar hit, with the state Comptroller's Office projecting over $1 billion a year in lost sales tax revenue from data center exemptions. Illinois and Ohio have already paused new incentive approvals while they study the numbers before granting more.
Moody's Ratings vice president David Strungis told Bond Buyer that data center growth can strain existing infrastructure and force cities to build out new capacity. Costs that aren't recovered from the data centers themselves, he said, fall on the municipality's credit. Municipal bond portfolio manager Daryl Clements was more measured, declining to call it a credit risk at this point. Bond Buyer Intelligence analyst Jeff Lipton framed the exposure as a function of fiscal diversity: cities anchored to a single employer absorb more damage, and construction jobs tied to one build tend to be transitory.
A one-year freeze in New York, or the eighteen-month freeze Maine's legislature tried to pass, does not touch a single running facility. It touches the next one in line. Every CDU, chiller, and cooling tower ordered against a permit that hasn't been filed yet goes on hold with the permit. Utilities are financing new substations and transmission capacity against projected data center load. That is the same load behind the 500 megawatt buildout tied to Hochul's tax breaks upstate. They are betting the load lands on the old schedule. Vendors selling into a market already reshaped by $64 billion in blocked or delayed projects should price every pending moratorium bill as a delay, not a rumor. Virginia's fight over ratepayer costs and public opposition shows where this goes next. State by state, thermal load is the last number confirmed and the first one assumed.