Report: Data Center Buildout Projected to Create 120,000 Illinois Jobs by 2035

Data centers boost economy; risks can be mitigated through policy and industry standards.

LA GRANGE, IL, UNITED STATES, October 1, 2026 /EINPresswire.com/ — Illinois data center investments over the next decade are expected to create more than 120,000 jobs, boost the economy by billions of dollars and generate almost $300 million per year in property tax revenues, according to a new study by the nonpartisan Illinois Economic Policy Institute (ILEPI) and the Project for Middle Class Renewal (PMCR) at the University of Illinois at Urbana-Champaign. The report also concludes that public concerns around utility costs and other project development impacts can be mitigated by policy guardrails and project design standards.

Read the Report, Data Centers in Illinois: Economic Impacts and Key Policy Considerations.

Illinois ranks in the top 10 states nationally for development of data center facilities that house large computer servers, storage, and networking equipment necessary to support cloud computing and artificial intelligence (AI) technologies. The Chicago area is the 3rd-largest data center market in the United States. About $16 billion was spent on construction of these facilities between 2020 and 2024, with another $57 billion planned over the next decade. These facilities comprise 7% of the state’s total electricity demand. Illinois is one of 38 states that offer sales tax exemptions on equipment, materials, and infrastructure to spur development, but those exemptions were suspended by Governor JB Pritzker in June.

“Over the past decade, data centers have become a major component of Illinois’ economy, driving GDP growth, boosting employment in high-wage sectors, and contributing substantially to the property tax base that funds local schools and other core public services,” said ILEPI Economist and study coauthor Frank Manzo IV. “But they also impact our energy infrastructure, water resources, and state budget. This research provides a comprehensive picture that can help inform policy around future development.”

For the analysis, researchers collected 75 case studies on data center projects detailing overall investment, project cost inputs, job creation, energy and water usage, property tax payments, and more. The information was compiled from a range of state, county, and industry sources, and utilized industry-standard IMPLAN analysis to forecast economic impacts of future projects.

Researchers found that data center projects over the next decade would create 39,000 skilled construction jobs during the buildout phase, 3,000 permanent positions such as IT specialists and engineers once operational per year, and more than 41,000 induced jobs in the supply chain and at local businesses.

“While there are concerns about how AI technology will affect humans, including job displacement, the buildout of Illinois’ data center infrastructure will be an engine of high-wage job creation and support for the institutions that we rely on to train new workers,” Manzo added. “At least a third of the new employment opportunities connected to these facilities will pay six-figure incomes, and two-thirds of all property tax revenues will support local school districts.”

Researchers found that a new hyperscale data center could enable local governments to deliver property tax relief of 3% to 10% for local homeowners in the average-sized county. One operational data center in DeKalb, for example, generates more than $30 million in annual property taxes—including $19 million for public schools—allowing residential property taxes in the county to grow 4% slower than the rest of the state.

While highlighting the economic benefits associated with data center development, researchers cautioned that these facilities can carry risks—particularly for energy grids. Illinois currently has 19 data centers per million residents. Without an increase in energy supply or additional changes by utility companies or state policymakers, researchers estimate that 6.5 gigawatts (GW) of planned data center expansion—equivalent to powering 4.5 million homes—could increase electric bills by $12 per month by 2035.

“While Illinois is currently a net energy exporter, data centers consume large amounts of electricity and Illinois will need additional clean power supplies alongside policy reforms to protect ratepayers as new facilities come online,” said ILEPI Research Analyst and study coauthor Jacob Hager. “The evidence shows that requiring data centers to invest in their own energy and infrastructure needs is an especially valuable policy tool, which is how states with the highest concentration of data centers have seen the lowest spikes in residential electric bills since 2019.”

Overall, researchers concluded that Illinois’ geography, proximity to resources needed to cool data facilities, and abundance of skilled workers have helped the state become a leading destination for data center investments. They noted that reforms could be implemented to maximize the economic value of data centers while minimizing their costs. Policy options include implementing cost-sharing agreements such that data centers cover 100% of the new energy they need, incentivizing data centers to bring their own Illinois-based clean energy, reforming the state’s sales tax exemption to promote projects meeting stronger energy and environmental benchmarks, standardizing closed-loop recycled water or air-cooling systems to reduce water usage, expanding battery storage and heat waste recovery at facilities, and improving public disclosure by banning non-disclosure agreements (NDAs) with elected officials.

“The available evidence strongly suggests that data centers can generate positive outcomes for Illinois’ economy and workers, especially if accompanied by responsible, reasonable guardrails that protect taxpayers, ratepayers, and natural resources,” concluded PMCR Director and study coauthor Dr. Robert Bruno. “Ultimately, these developments need to be built on a foundation of transparency and sound policymaking that is appropriately responsive to the needs of workers, taxpayers, and our communities.”

The Illinois Economic Policy Institute (ILEPI) is a nonprofit, nonpartisan research organization founded in 2013 to deliver actionable research and expert analysis on public policy issues impacting businesses, working families, and taxpayers.

The Project for Middle Class Renewal (PMCR) at the University of Illinois at Urbana-Champaign investigates working conditions in today’s economy to elevate public discourse aimed at reducing poverty, creating more stable forms of employment, and promoting middle-class jobs.

Todd Stenhouse
Illinois Economic Policy Institute
info@illinoisepi.org

Media gallery

About The Author

Written By: EIN Presswire