Gov. Kathy Hochul (D-NY) again acquiesced to her socialist overlords this week when she issued the nation’s first statewide moratorium on data center construction. Hochul was immediately thanked by socialist Rep. Alexandria Ocasio-Cortez (D-NY), who is pushing her own national data center ban in Congress.
Hochul’s infrastructure-development moratorium comes just weeks after she agreed to bail out socialist New York Mayor Zohran Mamdani’s budget, which required billions of dollars in state money to balance. Hochul is up for reelection in November.
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While a smattering of cities, including Denver, Seattle, and Flint, Michigan, have already halted data center construction, Hochul’s is the first statewide moratorium. The legislature passed an even more far-reaching infrastructure-construction ban this spring, but Hochul has declined to sign it so far. The yearlong executive order she signed Tuesday appears to be an effort to determine whether socialists ascendant in the Democratic Party can be appeased.
Hochul accused data center development of threatening to “hike up utility bills, deplete natural resources, and create uncertainty for New Yorkers.” But there is no evidence that data centers are to blame for rising electricity prices. That honor goes to Hochul and her fellow Democrats, who have imposed costly renewable energy mandates, raised the price of fossil fuel generation through the Regional Greenhouse Gas Initiative, shut down the Indian Point nuclear plant, and banned hydraulic fracturing of New York’s abundant natural gas reserves. Every one of these policies drives up electricity prices by restricting reliable supply, subsidizing more expensive alternatives, or forcing ratepayers to finance the state’s costly transition to intermittent energy sources.
The only person creating “uncertainty for New Yorkers” is Hochul, who is also pushing legislation that would strip data centers of tax subsidies. Not only do data centers routinely generate far more in tax revenue than they receive in subsidies, but retroactively revoking existing tax breaks would send a terrible signal to future developers: The state cannot be trusted.
Of course, as a socialist, Ocasio-Cortez was motivated by more than environmental concerns and energy costs in pushing for a data center construction ban. In her post thanking Hochul, Ocasio-Cortez said the construction ban “gives lawmakers time to put strong protections in place and guarantee AI benefits all of us, not just a powerful few.”
Ocasio-Cortez and her socialist allies seem unaware that the data center construction boom has been a boon to many working-class people, including blue-collar construction workers, the very people the Democratic Party once represented before it became the party of campus socialism.
There is no official government count, but data infrastructure development is estimated to have created between 200,000 and 400,000 construction jobs nationwide. Anecdotally, the data center construction boom in Virginia alone doubled the membership of the local electricians’ union. Given those numbers, it is not surprising that United Association of Union Plumbers and Pipefitters President Mark McManus called Hochul’s ban “a shortsighted moratorium” that “only accomplishes one thing: It kills good-paying union jobs.”
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Just as Mamdani’s rent freeze will not lower rents in New York City and will, in fact, drive them higher by discouraging property owners from investing in and adding housing to the market, Hochul’s data center ban will neither lower electricity bills for New York residents nor make the environment any cleaner.
Socialism does not work because it fails to create incentives for those with capital to employ it productively. “Democratic socialism” is no different, as residents of many blue states are finding out.
