Potential Kentucky Data Center Sites by Region · Commonwealth Economics Partners
One data center. $290 million for the county that lands it.
Data centers are the backbone of the digital economy, and the states that welcome them are collecting real money for schools, fire departments, and county services. We commissioned an independent Lexington economics firm to put Kentucky numbers on that opportunity. Commonwealth Economics modeled the same $4 billion campus in five different regions, so the finding holds no matter where a project lands. Every region collects.
$290M–$435M
In city and county tax revenue over 12 years, depending on region
$167M–$222M
Directly to local public school districts
$230M–$237M
In state tax revenue over the same period
413–530
Ongoing jobs supported across Kentucky’s economy
01 Context
Data centers bring billions in investment and high-wage jobs to local communities.
Every search, every video call, every payment, and every AI tool now running in a Kentucky classroom or clinic depends on a data center somewhere. That infrastructure is being built right now, at a scale the country has not seen since the interstate highways, and states are competing hard for it. Kentucky has the electricity, the land, the water, and the workforce to win some of it.
The question in front of county commissions is what a campus like that actually delivers to the community hosting it. Some critics argue the buildings take more than they give back. That claim is testable: take a specific facility, apply the tax rates already on the books, and add up what a county would collect.
So we commissioned Commonwealth Economics Partners, an independent Lexington firm, to run those numbers. The study estimates the state and local economic and fiscal impact of a hypothetical $4 billion, 400-megawatt AI data center campus: one to two million square feet of building, constructed over about two years.
Why five regions instead of one site
No site has been selected in Kentucky, and property tax rates vary from county to county. A study built around one favorable location would prove very little.
To account for the differences across the varying tax rates, Commonwealth Economics created five regions of six to nine counties each across Kentucky and estimated the impact of a hypothetical $4 billion, 400-megawatt data center in each one. The estimates are based on average rates across each region’s local taxing jurisdictions.
Why five scenarios instead of one
The totals shift by region, and every scenario lands in the same range. In all five, the local school district is the single largest recipient. This opportunity is available to every part of Kentucky, not just the counties along the interstates.
What “400 megawatts” describes
Power capacity is how the industry measures a campus, and 400 megawatts describes the size of the electrical connection the site is built to draw. It is the sector’s standard unit of scale, which is why the study is built around it.
Where the $4 billion goes
About $700 million into land and buildings, and about $2.5 billion into equipment: servers, networking gear, cooling systems, generators, switchgear. That split is what drives the tax numbers, because Kentucky taxes equipment at a much higher rate than real estate.
Who works there
Roughly 200 permanent staff at an average of $105,000. About 100 monitor and maintain IT, electrical, and cooling systems. The other 100 handle security, major repairs, facilities, and grounds. These are technician and trades careers, open to workers with a two-year degree or an apprenticeship.
02 Summary of findings
Wherever it lands, Kentucky collects.
Pick a region below. The facility is identical in all five scenarios, and the only variable is the tax rate of the county hosting it. Every region clears $290 million in local revenue over twelve years.
The five modeled regions
Tap a region
How to read the region figures
Each region contains six to nine counties with different rates. Commonwealth Economics averaged the rates within each region into one composite, then applied it to the facility. The result describes a representative county in that region rather than any named county.
12-year local tax revenue
Northern Kentucky Region
$435M
Collected by the host county over the two-year construction period and the first decade of operations.
Local public schools$222M
All other local taxing districts$213M
State of Kentucky, 12-year total$235M
Local taxes in the first operating year$56M
Local taxes per campus employee, per year$282,000
Construction spending in the region, per year$604M
Construction jobs supported in the region3,006
Local bodies that share this revenue
SchoolsCityCountyFire dept.LibraryHealthExtensionAmbulanceSpecial districts
Every region clears $290 million
Public schools
All other local districts
Northern Kentucky collects the most, and no region comes up short
Northern Kentucky produces the largest local total because its city, county, and fire district rates are the highest of the five regions. Eastern Kentucky has the highest school rate of any region, at $0.7881 per $100 of equipment value, which is why its school figure sits close to Northern’s on a smaller overall base.
What this means for Kentucky
About $145 million separates the strongest region from the weakest over twelve years. Both ends of that range are transformational for a rural or mid-sized county budget. Every region in this study delivers a substantial new revenue stream to the community that hosts the campus.
Employment
Thousands of construction jobs, then permanent careers paying $105,000.
A build of this scale puts 2,800 to 3,200 Kentuckians to work across the host region every year for two years, most of them in the building trades. The permanent roles that follow pay well above the state average, and the county’s long-term return comes primarily from the tax base.
During construction, about two years
2,800 to 3,200
Construction jobs each year during the two-year build phase, including roughly 2,065 direct construction and on-site positions. Regional economic output during the build runs $1.1 billion to $1.3 billion.
What a “job-year” is
One job-year is one full-time position for one year, and it is the standard unit for temporary work. We use it here because a two-year build filled by rotating crews should not be described as 3,000 permanent jobs.
Once operating, indefinitely
413 to 530
Ongoing Kentucky jobs. About 200 are direct, full-time positions paying an average annual salary of $105,000, against a projected Kentucky average wage of $66,450. Another 213 to 330 are supported through supply-chain and household spending.
Why the wage figure matters
At $105,000, these technician and trades positions pay about 58 percent above Kentucky’s projected average wage. Two hundred jobs at that level shift a rural county’s earnings profile and give local graduates a reason to build a career at home.
Cost to serve
Counties collect far more than they spend serving these sites.
County officials weighing any development ask whether it will pay for the services it consumes. The standard measure is a revenue-to-cost ratio, which compares the tax revenue a local government collects from a category of property against what it spends serving that property: roads, emergency response, water and sewer, schooling for workers’ children, and administration.
A ratio of 1:1 means a development pays exactly for itself, and anything below that means existing taxpayers cover the difference. Residential subdivisions frequently land under 1:1, which is why growth alone does not improve a county’s finances.
Two mature Virginia markets have been measured directly, and Commonwealth Economics uses them as the benchmark for what Kentucky counties should expect. The results are not close.
What this means for Kentucky
Mature data center markets nationally collect $13 to $26 in local tax revenue for every $1 spent serving these sites. Manufacturing, Kentucky’s traditional business recruitment target, returns roughly $4. These facilities generate substantial, durable revenue for the services families rely on most, while asking comparatively little of local government.
Loudoun County, Virginia26 : 1
Prince William County, Virginia13 : 1
Manufacturing, typical4 : 1
Break-even1 : 1
Bar length is proportional to the ratio. Loudoun and Prince William figures come from The Impact of Data Centers on Virginia’s State and Local Economies, prepared by Mangum Economics for the Northern Virginia Technology Council, 2024. The manufacturing benchmark is cited in the Commonwealth Economics report.
Residents see this money in four specific places
County revenue matters to a family when it reaches the classroom, the firehouse, or the property tax bill. The study identifies four channels where it does.
Nine taxing districts, not one government
Kentucky property tax is levied separately by schools, the city, the county, the fire department, the library, the health district, the extension office, the ambulance district, and any special districts. A data center pays all of them. The volunteer fire department that responds to the campus is also funded by it.
Room to cut residential rates
In a small or mid-sized county, a facility this size typically becomes the largest single taxpayer on the roll. In Loudoun County, Virginia, one of the country’s largest data center hubs, that revenue has allowed the county to lower residential property tax rates for ten consecutive years.
Fiber that stays after construction
These campuses require high-capacity, low-latency fiber with multiple carriers and redundant routes. That infrastructure is built to serve the site and it stays in the area, and it becomes a force multiplier for Main Street businesses, schools, and households that have waited years for that kind of connectivity.
Revenue that renews itself
Servers are replaced on roughly a five-year cycle, building systems on fourteen years, generators and electrical equipment on eighteen. Each refresh puts new equipment value back on the tax roll instead of letting the base depreciate toward zero.
03 Schools
Millions in new school revenue, and more resources for every student.
In all five regions, the local school district receives a larger share of the new revenue than any other taxing body. Because the campus barely changes enrollment, that money is available for teacher pay, buildings, and classroom technology rather than absorbing growth.
The servers are what make the school numbers large
Most large developments are taxed mainly on land and buildings. In a data center, about $2.5 billion of the $4 billion sits in servers and equipment, which Kentucky classifies as tangible personal property.
The Commonwealth taxes that equipment at more than four times its real property rate, and school districts apply a rate in the same range to both. Kentucky’s existing tax code already rewards this kind of investment.
State rate on land and buildings$0.109
State rate on equipment$0.450
School rate on equipment, Western KY$0.557
School rate on equipment, Eastern KY$0.788
Per $100 of assessed value. School rates are regional averages across the counties in each region.
What each school district would collect
Twelve-year totals, ranked. These are the school portions of the local revenue figures above.
What this means for Kentucky
School funding pressure in Kentucky usually comes from enrollment growth outrunning the tax base. A campus with 200 employees adds essentially nothing to district enrollment, so the revenue arrives with no matching increase in the cost of educating students.
That is the practical difference between a data center and a residential development of comparable assessed value. A district that lands one gains room for teacher pay, building maintenance, and technology in classrooms across the county.
04 Evidence from other states
Other states are already collecting. Kentucky is still deciding.
The Kentucky figures are estimates because no campus has been built here yet. States that competed for these projects years ago have real collections on the books, and their results are the best available check on whether a model like this holds up.
Virginia
The most mature market in the world
- $1 billion in local tax revenue and $640 million in state revenue from data centers in 2022
- Average data center pay of $134,308, more than double Virginia’s average income of $62,250
- Each direct data center job supports an estimated 3.5 additional jobs elsewhere in the economy
- Loudoun County has lowered residential property tax rates for ten consecutive years
What it demonstrates: the revenue holds up for decades after the ribbon cutting. Virginia has the highest concentration of data center capacity on earth, and its host counties are using the proceeds to cut homeowner taxes.
Source: The Impact of Data Centers on Virginia’s State and Local Economies, Mangum Economics for the Northern Virginia Technology Council, 2024. Rate-cut figure from Loudoun County.
Texas
The clearest look at scale
- $1.61 billion in state and $1.60 billion in local tax revenue in 2024 alone
- 40.9 million square feet operating, carrying $49 billion in real property and $98 billion in taxable equipment on local rolls
- Announced expansion could add an estimated $4.91 billion a year in local and school revenue
What it demonstrates: the equipment inside the building is what creates the tax base. Texas carries twice as much assessed value in servers as in real estate, which is exactly the mechanism driving the Kentucky school figures above.
Source: Texas State and Local Tax Revenues from Data Centers, Mangum Economics for the Data Center Coalition, February 2025.
Ohio
The nearest comparison to Kentucky
- 24,000 direct data center jobs and 100,000 total jobs supported in 2024
- $8 billion in labor income and $14 billion added to state GDP
- $1 billion in combined state and local tax contributions in 2024
- Over $40 billion in private capital attracted in under a decade
What it demonstrates: a neighboring state with a comparable workforce and power profile built this industry from nothing in under ten years. Ohio’s advantage was a tax code that treated data center equipment competitively. Kentucky is competing against that.
Sources: PwC, Economic Contributions of Data Centers in the US, for the Data Center Coalition, as cited in NetChoice’s testimony to the Ohio House Select Committee on Data Centers. Capital investment figure from the Ohio Chamber of Commerce Research Foundation.
Georgia
What it does to wages
- Average data center pay rose 64% from 2010 to 2020, from $78,500 to $128,700
- Statewide private-sector pay rose 35% over the same decade
- Roughly 3,480 direct positions paying about $276 million a year in wages and benefits
- Georgia’s share of tech workers moved from 20% below the national average in 2010 to about 40% above it by 2020
What it demonstrates: the wage effect compounds over time. The industry added jobs and it also pulled the state’s entire technical workforce upward relative to the rest of the country, creating a pipeline for the next generation of Georgia workers.
Source: The Impact of Data Centers on the Georgia Economy, Mangum Economics, 2021, commissioned by the Georgia Chamber of Commerce Foundation, Metro Atlanta Chamber, Data Center Coalition, and Technology Association of Georgia.
Nationally
PwC estimates the data center industry supports 5.5 million American jobs directly and indirectly, contributed $926.9 billion to US GDP in 2024, and generated $204.4 billion in federal, state, and local tax revenue. The Progressive Policy Institute’s Investment Heroes 2025 ranks tech and internet as the top sector for domestic capital investment, ahead of energy, telecom, pharmaceuticals, and manufacturing, driven primarily by data center and AI infrastructure buildout.
05 How the study was built
The method, and the assumptions it rests on.
Any economic impact estimate rests on its assumptions, and readers deserve to see them. Here is what Commonwealth Economics did and what it had to assume to do it.
Direct, indirect, and induced
Economic impact figures always exceed the initial spending, and the reason is straightforward. Money spent at a site moves through the local economy in three stages, and the study counts all three.
Stage one
Direct
What the project itself spends: wages to its own employees, payments to contractors, purchases of materials, maintenance and repairs.
Stage two
Indirect
What the project’s suppliers spend to fill those orders. A concrete supplier buys cement. An electrical contractor buys conduit and hires a subcontractor.
Stage three
Induced
What all of those workers spend from their paychecks. An electrician on the site buys groceries, pays rent, and eats at a restaurant nearby.
How these effects were measured
Indirect and induced effects are real, and they are also where impact studies most often overreach. Commonwealth Economics estimated them with IMPLAN, an input-output model built on county-level Bureau of Economic Analysis and Bureau of Labor Statistics data that is standard in government and academic work. The firm used IMPLAN’s multi-regional framework so that activity crossing from a region into the statewide total is counted once.
Core assumptions
- Power capacity400 MW
- Real property value$700M
- Tangible property value$2.5B
- Direct employees per megawatt0.50
- Average income per employee$105,000
- Construction period24 months
- Average inflation3.00%
- Construction workers paying KY income tax60%
- State income tax rate assumed3.5%
How the regional rates were built
For every county in a region, Commonwealth Economics pulled the current rate for each of the nine local taxing jurisdictions. Where a county has multiple school districts or sub-county districts, those were averaged into one county rate. Those county rates were then averaged across the region to produce one composite rate per jurisdiction, which was applied to the modeled property values.
Tangible property was depreciated on Kentucky’s schedules by class: computers and related equipment on a five-year replacement cycle, interior building systems on fourteen years, and generators and electrical equipment on eighteen years. Hardware replacement costs were assumed to rise with inflation.
What the study does not claim
- The campus is hypothetical. No project has been announced or sited in Kentucky. This models a representative facility to establish what one would be worth.
- The figures are pre-incentive. They are gross statutory tax liabilities. Most jurisdictions that successfully recruit these projects negotiate abatements or exemptions, so these are theoretical maximums and real collections could be lower.
- A region is not a county. Regional figures describe a representative county built from averaged rates. An actual county’s collections would differ from its regional average.
- Valuation is a real variable. The estimates assume the Property Valuation Administrator does not undervalue the property and that self-reported equipment values reflect fair value. Assessment appeals and exemptions would change the result.
- Tax law is assumed frozen. No change in state or local tax policy affecting data centers is modeled. Kentucky’s individual income tax is on a statutory phase-down path under House Bill 8 of 2022, which would reduce the income tax component over time.
- Hardware replacement labor is excluded. The work of replacing servers every few years is left out of the totals entirely. Commonwealth Economics notes it would be additive.
- Not for bond issuance. Commonwealth Economics expressly prohibits using this report as the basis for issuing bonds, and it is not legal advice.
- Commissioned research. The study was commissioned by NetChoice, a trade association representing online businesses. Commonwealth Economics is an independent Lexington firm and conducted the analysis.
06 Conclusion
Data centers get built where they are welcome.
A hyperscale campus can be sited almost anywhere with power, land, water, and fiber. That makes this a policy question, and these projects go to the states that make themselves easy to say yes to.
Kentucky already has the fundamentals. The report identifies relatively low electricity costs, large developable sites, water availability, and a technically capable workforce. This study supplies the arithmetic, and the findings are consistent across every region studied: $290 million to $435 million in city and county tax revenue over twelve years, $167 million to $222 million of it directly to local school districts, and a revenue-to-cost ratio that beats manufacturing several times over.
Ohio built a $40 billion industry in under a decade. Virginia’s host counties are cutting homeowner taxes. Texas collected $1.6 billion in local revenue in a single year. None of those states got there by accident, and none of the campuses that produced those numbers were obligated to land where they did.
This report gives Kentucky communities a clear look at what data center investment would mean for their tax base, their schools and their local economy.
Steve DelBianco, President and CEO, NetChoice
Kentucky does not have to wonder whether a data center would pay off. The Commonwealth only has to decide whether it intends to compete for one.
Communities deserve straight answers on electricity rates, water use, and noise, and the report addresses each with the current evidence. Those are terms to negotiate with utilities and developers, and Kentucky should approach them that way. State and local leaders who keep the Commonwealth’s tax code competitive and give these projects a fair hearing will be the ones cutting ribbons and funding schools with the proceeds.
This analysis is part of NetChoice’s ongoing Data Centers 101 series on the infrastructure behind the digital economy.