West Virginia Gov. Patrick Morrisey has unveiled a seven-point plan developed with lawmakers that would dedicate 50% of revenue from approved hyperscale data center projects to reducing and eventually eliminating the state personal income tax, while directing remaining funds to counties and infrastructure upgrades including public water systems in economically distressed regions.
The proposal comes as data centers powering the artificial intelligence boom have become a political flashpoint nationwide. States are looking to attract billions in investment and new jobs, while communities raise concerns about utility costs, water use, and local control over development.
What the Right Is Saying
Governor Morrisey framed the plan as a proactive 20-year development strategy that puts West Virginians first. He emphasized that none of the High Impact Data Center Designation revenue would enter the state general fund, with all proceeds dedicated to tax relief and local investment.
"Today, as the world stands on the cusp of a new digital and economic frontier, West Virginia is stepping forward once again to lead, not by repeating the mistakes of other states, but by implementing a proactive, 20-year development strategy on our terms," Morrisey said in a statement obtained by Fox News Digital.
The governor also highlighted the plan's broader economic benefits. "This shared framework gives us the exact blueprint we need to attract billions in private investment, create thousands of high-paying construction and technology jobs, lower taxes for our citizens, and revitalize economically distressed regions, all while preserving the wild and wonderful state we call home."
Conservative supporters argue that directing HIDC revenue away from general government spending and directly to taxpayers represents a novel approach to tax relief that differs from typical corporate incentive packages.
What the Left Is Saying
Progressive Democrats and some community advocates point to neighboring Virginia's experience as a warning sign for West Virginia's ambitions. Rep. Suhas Subramanyam, D-Va., whose district in Ashburn hosts one of the highest concentrations of data centers in the world, offered sharp criticism.
"We are a cautionary tale for the rest of the country," Subramanyam said. "If my district were a country, it would have more data centers than almost every other country in the world."
West Virginia House Minority Leader Sean Hornbuckle, D-Huntington, who was listed as a sponsor of the 2025 bill underpinning Morrisey's plan, has since called for amendments to allow local control over data center development. He spoke publicly about concerns at a June event.
"We are not going to allow a hostile takeover in our communities," Hornbuckle said according to the Steubenville Herald-Star. "We all know what House Bill 2014 did, and it's setting a very dangerous precedent in the state of West Virginia, where we all know we love our property rights."
Community opposition has already surfaced along roads in Jefferson and Berkeley counties in West Virginia's Eastern Panhandle, which borders the Washington, D.C. metro area. "No Data Centers" signs have appeared alongside concerns about data centers pushing up against residential areas.
What the Numbers Show
Under Morrisey's seven-point plan, data center revenue would be distributed as follows: 50% dedicated to reducing and ultimately eliminating the state personal income tax; 30% directed to counties hosting data centers for schools and local government; 10% distributed equally among all 55 West Virginia counties; and 10% allocated to infrastructure upgrades including public water systems.
The High Impact Data Center Designation process was established under a separate 2025 state law. The plan does not specify projected revenue figures or timelines for complete income tax elimination, which would require legislative action to implement.
West Virginia currently levies a state personal income tax with rates ranging from 2.36% to 4.82% depending on income brackets. The state's population of approximately 1.8 million residents generated roughly $1.6 billion in income tax revenue according to the most recent available state budget figures.
The Bottom Line
West Virginia's proposal represents a test case for whether data center growth can directly fund broad-based tax relief rather than filling general government coffers. The plan's success would depend on attracting sufficient hyperscale projects, managing infrastructure demands, and addressing community concerns about local control.
Critics warn that without stronger safeguards, West Virginia could replicate the rapid development patterns seen in Northern Virginia, where residents say data center expansion has strained utilities and diminished quality of life. Supporters counter that explicit revenue earmarks and infrastructure investment provisions distinguish this approach from traditional economic development incentives.
The plan requires ongoing legislative action to implement its various components. Lawmakers return to session with debates expected over local control amendments and specific project approval criteria under the HIDC framework.