Illinois business leaders are screaming their heads off again about pending legislation in Springfield that they say threatens the future of what has been a star of the Illinois economy: the rapidly expanding data center industry.
How the issue is resolved poses a key test for Gov. J.B. Pritzker, who often has pointed to legislation he pushed through giving new tax incentives to data centers as proof that even a liberal Democratic governor like him can be good for jobs and economic growth.
At issue is legislation pushed by IOEU Local 399, a highly influential and politically active labor group. The measure would require data centers to not only use union labor in building data centers, but also effectively hire from union-approved lists in filling operational jobs, many of them highly technical.
The legislation already has been approved by the House by a relatively narrow 65-42 margin, but needs concurrence from the Senate.
Pritzker moved to block passage of the measure this spring, with officials saying both sides would attempt to negotiate a compromise over the summer. There still is no sign that the governor is inclined to sign off on any bill that is not agreed upon by both sides.
But now insiders report those negotiations have broken off without much success, potentially making the governor’s position a little more difficult.
“After thoughtful and sometimes difficult conversations throughout the summer, we have far more questions and uncertainty than answers than even where we were near the end of May,” said Brad Teitz, a lead negotiator for the industry and vice president for government relations for the Chicagoland Chamber of Commerce.
“The labor peace agreement proposal alone is continuing to put on hold and jeopardize billions more in investment coming to Illinois,” added Teitz in a statement. “There are 33 other states that have similar data center incentives and companies will simply look elsewhere because of the instability being injected into the Illinois market.”
In a follow-up interview, Teitz said that, while talks could resume, business groups now do not want the legislation considered in the Legislature’s fall veto session, which will last six days over two weeks beginning on Oct. 19.
“This isn’t about pay,” Teitz said, noting that, to get incentives from the state, data centers have to pay their workers at least 120% of the median income in the county in which someone works. “This already is the most pro-labor incentive in the country.”
One reason Pritzker may have to hold firm is that labor is not unified behind the proposed bill. For instance, if Illinois lost data centers because of the bill, construction unions would lose the far more numerous jobs covering those who build centers.
Pritzker, IOEU and bill sponsor Sen. Elgie Sims, D-Chicago, all declined to comment.
Labor has been flexing its muscle in Springfield as Pritzker nears a re-election campaign in which he need union support. The issue may flare up in the package boosting incentives for electric vehicle manufacturers and suppliers that Pritzker is expected to unveil soon.