Texas is losing billions of dollars due to tax exemptions for data centers. Data centers have been getting tax exemptions since 2014, but no one would’ve expected how much that would amount to today. Texas began to give tax exemptions to data centers because of the low cost of resources that were required, but since then, there has been a big boom in the industry, which sent the amount of sales tax exemptions from $5.4 million to $1.3 billion this year. According to the Texas Tribune, Exemptions are expected to go up 33% in the next 5 years. Texas decides not to lower or even terminate tax exemptions because it wants to keep the title of being the best state for data centers.

Well, now Texas needs to spend about $174 billion in the next 50 years to avoid a massive water crisis in Texas. Just 4 years ago, it was projected to be $80 billion, but now it’s more than double what it was 4 years ago. What’s the problem? Texas is overly dependent on rainfall as its source of water. So droughts and changing rainfall patterns can really hurt the water supply. Texas isn’t keeping up with the demand in water, and is actually losing a lot of it. If a major drought hits Texas, the demand for water will exceed the supply, and it could be by a huge gap if the lawmakers don’t do something about it. The water board of Texas was able to gain funds to enhance the infrastructure in 2023. They plan on building a water grid around Texas to transport water into the water supply, because currently, water systems work independently, but if the water grid unites them, certain areas that are struggling with water shortages will be able to get the water they need from areas with heavy water intake.

Now the question is whether Texas will cut down on data center tax exemptions and begin to build up money to save Texas from a severe statewide water crisis, or will it continue to invest in the industry and use any resources necessary to be the best.