‘This seems like a no-brainer’: Jake pitches data centers as a path to eliminating WA’s sales tax

Data centers are reshaping the economies of states willing to welcome them, and two stories out of Virginia and West Virginia caught the attention of Jake Skorheim, who tried to nudge co-host Spike O’Neill closer to his pro-data center position.

In Loudoun County, Virginia, home to “Data Center Alley,” the largest concentration of data centers in the world, developers have reportedly offered homeowners in the Regency neighborhood roughly $4 million each, more than double their home values, to make way for a massive new campus.

Meanwhile, West Virginia Gov. Patrick Morrisey unveiled a 20-year data center development plan that would direct 50% of all revenue generated by hyperscale projects toward reducing and ultimately eliminating the state’s personal income tax.

Jake Skorheim and Spike O’Neill, co-hosts of “The Jake and Spike Show” on KIRO Newsradio, agreed on more than they expected, though Spike set some conditions.

Jake asks why WA won’t follow suit

Jake said the West Virginia model should be a blueprint for Washington and questioned why the state isn’t pursuing a similar approach.

“Imagine that. All the extra money coming in from data centers, they’re saying we’re going to get rid of the state income tax,” Jake said. “Wouldn’t there be an amazing benefit statewide to have no sales tax in Washington? If they said, ‘We’ll put it out on the east side where there’s nothing and nobody.’ All the sales tax just gets wiped away. Wouldn’t that be amazing?”

He pointed to Quincy, Washington, as proof the model already works on a smaller scale.

“We talked about Quincy yesterday, how much money Quincy has benefited from. Massively,” Jake said. “This seems like a no-brainer to me.”

Spike says he’d take the money, but wants safeguards

Spike didn’t fight the premise. When Jake asked if he’d accept $4 million for his home to make way for a data center, Spike didn’t hesitate.

“They can keep the rugs and the towels in the closet at that number. You can have the dishes. You betcha, absolutely,” Spike said.

But Spike pushed back on the idea that data centers should get a blank check, citing Virginia Gov. Abigail Spanberger’s approach of requiring data centers to pay for excessive use of the power grid, directing tax revenue to rate rebates for residents, and making information about impacts available to homeowners.

“She’s not against data centers. She wants to make sure that they’re responsible neighbors,” Spike said.

He also raised the issue of residents who live next to a new data center campus but don’t get a buyout offer.

“How about the folks living next to the campus that they don’t want, that are still in their home, their Virginia home, but now it’s next to a 24/7 humming data center that bleeds into the grid or taps into the water supplies?” Spike said.

“Every time I hear that, do you know what I’m hearing? I’m hearing no sales tax. No sales tax, and that’s what I’m hearing,” Jake responded.

“You’re winning me over,” Spike said.

Watch the full discussion in the video above.

Listen to “The Jake and Spike Show” weekdays from noon to 3 p.m. on KIRO Newsradio 97.3