Full Breakdown
New Jersey Moves to End Unused Tax Credits for AI Data Centers
6/26/2026, 1:20:19 AM
Legislative Move to Sunset Credits
On June 26 the Senate Budget and Appropriations Committee approved S-4390, the “End Data Center Tax Credits Act,” which would cancel $250 million of unspent credits from the Next New Jersey program and shift the funds to energy-storage projects and a one-time credit for low-income electric customers. The bill now proceeds to a floor vote before the summer recess.
Background and Energy Concerns
The Next New Jersey program, created in 2024, earmarked $500 million in tax credits for AI-related data-center projects. To date only one award—$250 million to CoreWeave for a $1.2 billion conversion—has been granted. Lawmakers note that modern data centers can draw up to 300 megawatts, enough to power a small city, and warn that such demand strains New Jersey’s electric grid.
Economic Stakes
A 2026 PwC analysis linked the sector to 35,180 direct jobs, 172,020 statewide jobs, $17.9 billion in labor income, $25.6 billion in GDP and $2.7 billion in tax revenue. The bill would free $250 million for other energy initiatives.
Official Statements & Responses
Governor Mikie Sherrill’s plan urges data centers to “bring their own energy to the table, operate transparently, add value to the grid and our communities, and support good-paying jobs long-term.” NJEDA spokesperson Chris Flores said the agency remains committed to emerging industry and to creating jobs. NJBIA research analyst Jack Ramirez warned that cutting the credit would undermine New Jersey’s competitiveness as neighboring states vie for AI investment. Peter Chen of New Jersey Policy Perspective supported shift, noting the credit mainly benefits facilities.
Criticism & Opposition
Local officials in Andover and Millville have passed ordinances to block new data-center construction, citing higher electricity rates and grid stress.
Verbatim Quotes
- “There’s a real question about whether that is the best use of taxpayer money in 2026,” — Andrew Macurdy, Assemblymember (D)
- “The NJEDA is committed to supporting this emerging industry and the economic opportunities it can create for New Jersey residents, such as good-paying jobs,” — Chris Flores, NJEDA spokesperson
- “I wanted to highlight the importance of this tax credit. It’s not just data centers. It is an entire industry that we are really stunting the growth of here, and it’s important that we prioritize it,” — Jack Ramirez, NJBIA Research Analyst
- “pay their fair share by bringing their own energy to the table, operate transparently, add value to the grid and our communities, and support good-paying jobs long-term.” — Gov. Mikie Sherrill
Conflicting Reports
One source identifies CoreWeave’s $1.2 billion project in Kenilworth as the sole credit recipient; another cites a $1.8 billion Kenilworth facility approved for an NJEDA credit. The discrepancy remains unresolved.
What’s Next
The bill is slated for a full-chamber vote before the June 30 recess. If enacted, the $250 million will be administered by the Board of Public Utilities for energy-storage projects, and the low-income credit will be added to the upcoming fiscal budget.
