Noah Torok

March 13, 2026

Introduction

On December 17th 2025, the Springdale Borough Council approved a conditional use permit for the construction of an artificial intelligence (AI) data center [1]. While some were excited that the Pennsylvania town of just 3,400 would be welcoming a new employer and taxpayer, a citizen-led opposition was formed against the development. Those opposed to the measure voiced concerns that the data center would lead to increased utility costs as well as environmental and noise pollution. According to the Eco-Environment & Health Journal, data centers operate industrial equipment that can reach noise levels as high as 96 decibels, which is above the 85 decibel threshold health professionals believe to be harmful to hearing [2]. 

Furthermore, researchers at the University of Michigan have detailed how data centers consume astronomical amounts of electricity and water. They found that the developments consume up to millions of gallons of water every year, and rely upon 2 megawatt hours (MWh) of electricity on average, or about the same amount as a small town. Because of this, utility companies have begun to raise rates on residential customers. For example in Laffite, Louisiana, electricity rates were increased by 39%, while the owners of data centers have been able to negotiate lower rates directly with the companies [3]. 

Despite the opposition and concerns, the Springdale Council ultimately voted 5-2 in support of the development, but not without voicing their concern for the influence that its owner Allegheny DC Property Co. has over the local government. Springdale councilmember Antoinette Robbins reported that if the council did not approve the project, the developer would sue the small municipality: “… big businesses like this to come into a little community and threaten us, into bullying us, into submission, is basically what they’re doing.”  Springdale Borough Manager Terry Carcella noted that the approval process allowed the town to subject regulations on the development. If Allegheny DC Property Co. won a legal battle, the company may have been able to proceed without any input from the local government or its citizens [4].

The Complexities of Data Center Developments

Across Pennsylvania, an increasing number of municipalities are facing a rough economic reality. As costs to run municipal services continue to rise, towns of various sizes have been forced to adjust and limit spending in the absence of an economic savior. This phenomenon has been worsened in part by municipal fragmentation, the presence of several independent governments in a single area with overlapping interests and jurisdictions.

Towns like Springdale have been required to adapt to worsening economic conditions despite the fact that they continue to operate under a governmental model established generations ago and without a central employer and taxpayer. For instance, instead of combining resources with surrounding municipalities, Springdale continues to operate its own police department and water distribution system. This places a significant cost on the sparsely populated town, which has in part caused Springdale to impose a 9.75 tax millage rate, higher than the city of Pittsburgh’s 8.06 rate despite the fact the latter city has over 300,000 residents [5]. 

Millvale Borough, a town of 3,376 neighboring Pittsburgh, was forced to secure an emergency two million dollar loan after a 58% property tax increase failed to fully cover costs for the 2026 fiscal year. Millvale resident Jewel Crnkovinch-Presley reacted with extreme worry to the financial crisis, stating that “The fear is that we are going to lose our town” [6].

Given the immense burden that consolidating municipal services or boundaries poses, the development of AI data centers has given local governments the opportunity to brighten their economic horizons. According to the World Research Institute, tax revenue from data centers increased from $66 billion in 2017 to more than $162 billion in 2023. Local governments have the opportunity to take advantage of increased tax revenue to ensure their financial futures while also expanding municipal services. On the other hand, towns that have attempted to court developers or prevent them from abandoning projects have promised tax credits and exemptions to AI corporations. The use of such measures exempts companies from paying property taxes and other levies, limiting the positive impact that data centers have on the communities that they reside in. The use of tax credits and exemptions at a statewide level also limits the amount of money that could potentially be allocated to a city in a state’s budget. The less money a state or local government takes in through taxes, the less it can spend on its citizens and communities [7]. 

Currently, much of the news coverage on data centers has focused on those who either fully support or fully oppose new developments. However, it would be more reasonable for municipalities to not treat this policy as a winner take all scenario. The expansion of data centers can provide local governments with up to millions in additional tax revenue, making it less likely that they will have to eliminate services or raise levies on residents. At the same time, the increase of pollution and utility rates presents a serious problem that can affect generations to come. 

To remedy these conflicting attitudes, local and state authorities such as Springdale should be given the power to create regulations to help protect their communities and secure beneficial outcomes. Foremost, municipalities should be given the ability to limit the amount of pollution that can be produced by data centers. This would ensure that local communities would not become contaminated for the sake of big business. Meanwhile, data center developers and utility companies could negotiate deals to prevent rate hikes on the general public, such as through the financing of system upgrades. This would produce a benefit for developers, as it may help get public support on their side. In addition, municipalities should carefully offer tax credits without limiting the amount of revenue they would benefit from. This would help offset costs of data center development in the short term, but should not act as a permanent solution as it would diminish the impact that it would have on a local community. 

A recent Brookings report on community benefit agreements (CBAs) describes how local governments and data companies can address concerns over developments and ensure that its benefits are actually felt by the public. For instance, Lancaster, Pennsylvania was able to negotiate an agreement with data center owner CoreWeave that restricted water usage, established reliance upon clean energy, and limited pollution at a recently established development [8] [9].  Nonetheless, Lancaster’s incorporation as a city rather than a borough and its population of nearly 60,000 provides the town more resources and money to negotiate with developers. For example, Lancaster and other larger cities may have the ability to survive a prolonged lawsuit with a developer, while Springdale and similarly small towns are forced to grant the wishes of large corporations or be forced to cede the minimal amount of power that they hold.

If local authorities are given the power to ethically negotiate with data center developers, they may be able to ensure that they can serve their residents for several generations without a tax increase or financial crisis. No matter the size, class, or demographic makeup of a town, municipal governments and the citizens they represent deserve to have a say over whether a data center can be built in their community and should be able to dictate the final terms — not million-dollar corporations.

Image Credits: https://www.cbsnews.com/pittsburgh/news/proposed-ai-data-center-springdale/

Works Cited

[1] Scott, Caitlyn, Felicity Taylor, and Kalea Gunderson. “Councilmembers Approve Conditional Use Permit for Springdale Data Center.” WTAE, December 17, 2025. https://www.wtae.com/article/councilmembers-conditional-use-permit-springdale-data-center/69790687.

[2] Tao, Yu, and Peng Gao. “Global Data Center Expansion and Human Health: A Call for Empirical Research.” Eco-Environment & Health 4, no. 3 (2025): 100157. https://doi.org/10.1016/j.eehl.2025.100157.

[3] ​​Nguyen, Terry, and Ben Green. What Happens When Data Centers Come to Town? University of Michigan, 2025. https://fordschool.umich.edu/news/2025/growth-data-centers-requires-new-policies-mitigate-local-community-impacts.

[4] Scott, Caitlyn, Felicity Taylor, and Kalea Gunderson. “Councilmembers Approve Conditional Use Permit for Springdale Data Center.” WTAE, December 17, 2025. https://www.wtae.com/article/councilmembers-conditional-use-permit-springdale-data-center/69790687.

[5] Allegheny County, PA. “Allegheny County Treasurer .” https://alleghenycountytreasurer.us/real-estate-tax/local-and-school-district-tax-millage/.

[6] Coleman, Lily. “Millvale Residents Frustrated by Property Tax Hike in 2026 Budget.” WTAE, December 31, 2025. https://www.wtae.com/article/millvale-residents-frustrated-by-property-tax-hike-in-2026-budget/69893510.

[7] Walker, Carla, and Ian Goldsmith. From Energy Use to Air Quality, the Many Ways Data Centers Affect US Communities. February 17, 2026. https://www.wri.org/insights/us-data-center-growth-impacts.

[8] Brookings. “Turning the Data Center Boom into Long-Term, Local Prosperity.” https://www.brookings.edu/articles/turning-the-data-center-boom-into-long-term-local-prosperity/.

[9] Brookings. “Why Community Benefit Agreements Are Necessary for Data Centers.” https://www.brookings.edu/articles/why-community-benefit-agreements-are-necessary-for-data-centers/.