Today public backlash to data centers is outpacing policy. The issue became a unifier on the campaign trail during the 2026 midterms, with most voters opposing new data center construction nationally and a larger majority opposing a data center in their own community.¹

Voters are worried about utility cost increases and environmental impacts²—but they also fear that AI development is moving too quickly—with data centers the most visible manifestation of the AI economy.³ Moreover, while data centers generate construction activity and tax revenue, they offer few permanent jobs at a time of high anxiety about AI-driven worker displacement.

Without a framework that meaningfully addresses these concerns, opposition is likely to further intensify, making pragmatic policies harder to achieve.

Leadership Now supports policies that address AI costs and risks while preserving its potential to drive growth and U.S. competitiveness. But to fully harness that potential, elected leaders must put forward a proactive data center strategy that reflects local, regional, and national standards for costs, environmental impacts, and community benefits.

Developers should pay the costs they impose, protect electricity reliability, and meet environmental and community standards—while the government should provide clear rules and timely decisions for projects that meet those requirements.

Federal

• Set a minimum standard for data centers, covering cost, power sourcing, water use, environmental impact, public transparency, and community benefits. States may go further, but federal standards can help prevent a race to the bottom. Reflecting the Bipartisan American Affordability and Jobs Act (BAAJA), the federal framework should stipulate that new large loads pay for their power needs—including necessary upgrades—rather than passing costs on to consumers. Additional legislation should prevent the use of non-disclosure agreements that conceal public commitments or community impacts, with the goal of promoting trust, transparency, and fair competition.
• Reform permitting to establish clear timelines for environmental review, require concurrent rather than sequential agency processes, and designate lead agencies for major projects.
• Apply effective safeguards to on-site generation. Ensure that behind-the-meter power meets applicable permitting, emissions, water, and reliability requirements, recognizing that grid connection is preferable from an environmental, cost, and resilience perspective.
• Expand transmission and grid infrastructure, ensuring regional planning processes incorporate forward-looking demand from data centers and reinforcing the Federal Energy Regulatory Commission’s authority on cost allocation and backstop siting for interstate transmission.

State and Local

• Tie approval to developers’ compliance with a set of water, air quality, ratepayer, and public engagement standards—rather than case-by-case discretion, as has been done in Pa. and Utah.
• Pilot “AI town” community benefit or profit share models. Local and state governments should test ways to ensure communities benefit from data center development. Examples include reinvesting tax revenue into schools and infrastructure, as in Loudoun County, Va.; a minimum investment into workforce training and reskilling tied to data center presence; expedited access to frontier models for local communities; and required contributions by data centers directly into a community benefit fund, as in Lancaster, Pa. Community benefit models could also include local training pipelines for the skilled operations roles data centers require, so permanent jobs go to residents.
• Require transparent evidence of community benefits. State governments should publish expected tax revenues net of subsidies and public costs for planned projects, consistently scrutinize the taxpayer return on any data center tax incentives, and use enforceable community benefit agreements where appropriate.
• Encourage states and utilities to make better use of existing grid infrastructure and accelerate necessary upgrades, including by deploying grid-enhancing technologies.