Illinois could see tens of billions of dollars in new data center investment over the next decade, bringing significant employment and property tax benefits while intensifying concerns over electricity demand, water use and the role of state and local tax incentives.
According to an October 1 report by the Chicago Tribune, a new study from two labor-affiliated Illinois research organizations estimates that data centers currently planned for Illinois could generate approximately $57 billion in new investment, create 120,000 jobs and increase annual property tax revenue by roughly $300 million, with much of that revenue benefiting schools.
The expansion would build upon Illinois' already significant data center industry. The Chicago region is currently the nation's third-largest data center market, while Illinois ranks 10th nationally in data centers per capita. Of the 120,000 jobs projected by the study, approximately 39,000 would be skilled construction positions and 3,000 would be permanent jobs within data centers. Additional employment would come from suppliers and nearby businesses.
Energy Demand Raises Concerns
The projected economic benefits come with significant infrastructure challenges. According to the study, data centers currently consume approximately 7 percent of Illinois' electricity. Facilities now being planned would require an additional 6.5 gigawatts of electricity — roughly equivalent to the output of six typical nuclear reactors. The study estimates that, under current regulations, this additional demand could increase average residential electricity bills by approximately $12 per month.
The rapid expansion of data centers has consequently generated public opposition and increased scrutiny from policymakers. The study recommends several policy changes, including limiting residential electricity rate increases, requiring closed-loop cooling systems to conserve water and accelerating grid connections for data centers that develop their own clean-energy resources.
Local Incentives Could Face New Restrictions
Of particular interest to counties and other local governments is a recommendation that Illinois prohibit local governments from offering their own tax incentives to large data center operators.
The study cited previous reporting by the Chicago Tribune and Illinois Answers Project that data centers in three communities near O'Hare International Airport received abatements and reduced property valuations that lowered their tax obligations by nearly $100 million. At the state level, Illinois data center incentives reportedly cost approximately $983 million in tax revenue between 2020 and 2024 while helping attract $15.7 billion in investment.
Governor JB Pritzker paused the state's data center incentive program in July while the administration evaluates whether the incentives are encouraging development without sufficient consideration of consumer energy costs and environmental impacts. The study suggests that, if incentives are reinstated, Illinois could more closely tie them to policy objectives such as water conservation.
Issue Likely to Remain Before State Policymakers
Data center development is likely to remain an important issue for state and local governments as Illinois considers how to accommodate growing electricity demand while protecting consumers and preserving economic development opportunities.
Illinois lawmakers return for the fall legislative session on November 17. One day earlier, the Illinois Commerce Commission and other state agencies are expected to release a plan addressing potential electricity shortages and higher prices. State agencies have previously warned that neither Commonwealth Edison's northern Illinois service territory nor Ameren's downstate territory currently has sufficient resources to reliably meet projected 2030 requirements, with growing data center demand identified as a significant factor.
At a recent climate conference, Governor Pritzker reiterated his position that data centers should bring their own clean-energy resources and utilize closed-loop water systems, while indicating that a moratorium on new development alone would not resolve the issue.
For counties, the emerging debate presents competing considerations: data centers can generate substantial investment, construction activity and additions to the property tax base, but their growth also raises questions about energy infrastructure, water resources and whether the state should restrict the ability of local governments to offer development incentives.
This article summarizes reporting by John Lippert for the Chicago Tribune, published October 1, 2026.