Nebraska governor bars future tax incentives for data centers locating in state

LINCOLN, Neb. —

Nebraska Gov. Jim Pillen signed an executive order Monday barring new data centers from receiving tax incentives under the ImagiNE Nebraska Act.

Pillen said the decision reflects a desire to balance economic development with protecting the state’s natural resources.

“That’s why this is critical that we protect the people, that we protect our land and we protect our water,” Pillen said.

The order comes as skepticism of data centers continues to grow across Nebraska. Twelve counties have imposed at least temporary moratoriums on new data center development over concerns about water use, electricity demand and land use.

State Sen. Mike Jacobson of North Platte said he supports ending the incentives because he does not believe they are necessary to attract the industry.

“There’s no real strong competitive pressures right now to get them located here,” he said. “We should stand on its own.”

State Sen. George Dungan of Lincoln, who has also been skeptical of data center expansion, criticized the governor’s decision, arguing Pillen does not have the authority to make sweeping changes to a legislative incentive program through executive action.

“This is yet another example I think of the governor just doing whatever he wants and circumventing the legislative process,” Dungan said.

Dungan said the executive order contradicts the governor’s position during this year’s legislative session, when Pillen argued expanding data centers was important for national security.

“We have a governor that I think is trying to capitalize on a political football rather than actually address the problem of the way he should,” Dungan said. “This last session, the governor and the people who listened to the governor in the legislature passed a bill that was intended to bring more data centers into the state of Nebraska. And when an amendment was proposed by Sen. (Danielle) Conrad that would have said no tax incentives could go towards those data centers, it was roundly denied by folks who are now supporting this executive order.”

Asked what had changed since then, Pillen said he still wants data centers in the state, but he wants less state support.

“Nothing’s changed. It’s just simply we’re not giving the farm away to do it,” Pillen said.

While acknowledging growing local opposition to data centers, Pillen cautioned against permanently ruling them out.

“We’ve all had moments when we used the word never,” Pillen said. “And I’m old enough to admit that whenever I’ve used the word never, it was a mistake.”

According to figures from the governor’s office, between January 2021 and June 2026, Nebraska issued approximately $317 million in tax credits, direct refunds and sales tax exemptions to data centers. Data center projects also saw $15 billion in personal property exempted, resulting in an estimated $519 million in property tax exemptions based on a 2% rate.

A Platte Institute report released earlier this year found there are 39 data centers operating in Nebraska.

Pillen’s executive order also creates a data center task force that will study the industry’s impacts and provide recommendations to the Legislature.