Pritzker Pauses Illinois Data Center Tax Credits Over Resource Costs

J.B. Pritzker issued an executive order in June 2026 pausing the processing of new agreements and tax incentives under the state's Data Center Investment Program, effective July 1. The move follows the failure of the Illinois General Assembly to pass the POWER Act (House Bill 5513) during the spring session, which would have regulated the industry's impact on energy and water resources to prevent rising utility costs for residents.

Pritzker is calling for a comprehensive regulatory framework during the fall veto session. He proposes that data centers supply their own renewable energy, report water usage, pay a larger share of infrastructure costs, and enter into community benefit agreements. The governor also suggested banning non-disclosure agreements with local governments to increase transparency.

Labor organizations, including the Illinois AFL-CIO and Climate Jobs Illinois, have criticized the pause as shortsighted, warning that billions in investment and thousands of union jobs could migrate to neighboring states like Indiana, Kentucky, and Ohio. Conversely, environmental and consumer advocates support the action. House Speaker Emanuel Chris Welch noted that the pause lacked support within the Democratic caucus during the spring session, though lawmakers plan to hold listening sessions throughout the summer.

This action mirrors a similar pause ordered by Ohio Governor Mike DeWine and a one-year moratorium on large data center permitting passed by New York lawmakers. Existing incentive agreements entered before the July 1 deadline will be honored, and companies may still seek local tax relief.