December 29, 2025 – A decade-long subsidy package for a Compass Datacenters project in Meridian, Mississippi has been selected as the nation’s “Worst Economic Development Deal of the Year” for 2025 by The Center for Economic Accountability.
The Texas-based data center construction firm plans to build a campus containing eight single-tenant data centers in Lauderdale County on Mississippi’s eastern border. In return, the Mississippi Development Authority is exempting the company from state sale and use, corporate income and franchise taxes for the next decade, as well as coordinating local tax breaks, providing site preparation assistance and potentially providing other future tax credits and abatements.
The breadth and length of these tax breaks against the project’s minimal local economic impact, potential impacts on energy affordability in the region, poor transparency and other factors combined to make this project stand out in 2025 as the nation’s Worst Economic Development Deal of the Year.
This is the first data center project and first project in Mississippi to receive this award, which since 2018 has recognized a state or municipal government subsidy of a private company in the name of “job creation” and economic growth that goes further than any other that year across the nation to exemplify the wastefulness and ineffectiveness of economic development subsidy programs.
“Politicians and bureaucrats across the country competed hard this year to come up with egregious corporate welfare deals worthy of this honor, but Mississippi’s leaders ended up taking home the trophy,” said John C. Mozena, president of the Center for Economic Accountability. “We don’t expect them to be any happier about it than any of the past winners, but if they didn’t want to be held accountable for their decision to let a data center effectively crash in the state for free for a decade then they shouldn’t have made the deal in the first place.”
Decade-Long Tax Breaks
Many states offer sales tax abatements for data center projects, both on construction materials or on expensive computers and network equipment. Others offer real or personal property tax breaks. None of these abatements are good public policy to begin with, but Mississippi not only offers all of these tax breaks but then goes even further, exempting qualified data centers both from franchise taxes on the capital used in the state and from the state’s corporate income tax for an entire decade.
In addition, data centers like the Compass project in Meridian can include deals with municipal and county governments that could amount to as much as a 66% property tax break for 30 years.
“We’ve pointed out for years that data centers are terrible at local job creation, since the high-value jobs they enable are largely programmers in Silicon Valley, Shanghai, Mumbai or some other global tech hub,” explained Mozena. “That’s not an indictment of data centers or AI or tech companies in general, as that’s the nature of their business. But that does mean that it’s deeply irresponsible for Mississippi’s politicians and bureaucrats to give away a decade’s worth of tax revenues just so they can brag to voters about ‘high-tech job creation.’”
Under Mississippi state law, data center projects are only required to invest $20 million and create a minimum of 20 new jobs at 125% of the state’s average annual wage in order to qualify for these decade-long state tax exemptions. The Mississippi Development Authority may require other commitments over and above that level, but none have been announced.
“I’m sure plenty of employers in Mississippi would be happy to hire 20 new workers if that meant they could operate in the state virtually tax-free for a decade,” said Mozena. “For some reason, Mississippi’s elected officials have decided to give that deeply unfair privilege to one of the industries that least deserves it.”
Ultimately, there may be even more special benefits included in this deal than have been announced. For instance, if Compass creates 200 or more new jobs with health care benefits at or above the average annual salary in Lauderdale County over the next two years, it could potentially qualify for the state’s Advantage Jobs Incentive Program, which could result in the company receiving 10 years of payments from the state equal to as much as 90% of its employee income tax withholding payments, up to 4% of the company’s total annual salary bill.
Massive Power Consumption
Data centers use massive amounts of electricity, and Compass says that at full capacity, its Meridian data centers will consume as much as 500 megawatts of power. That’s roughly enough electricity to power one out of every five single-family homes in Mississippi, and that kind of demand will have an inescapable impact on the state’s electrical markets. (A 2025 Bloomberg investigation found that wholesale electricity costs in regions near data centers had increased by as much as 267% over the past five years.)
This massive power demand has already reportedly contributed to Mississippi Power’s decision to delay its plans to close older coal-fired power plants until the mid-2030s.
“Increasingly, states have started asking data center operators to either build or pay for the power plants that their facilities require,” said Mozena. “Many recent data center projects in other states came with commitments to build or purchase dedicated power plants to keep consumers from getting stuck with skyrocketing energy bills. That didn’t happen here, and Mississippians will pay the price.”
Transparency Failures
On its website, Compass says, “We strive for transparency with our customers in every area of our relationship from pricing and terms to your data center’s design, construction and on-going operations.” Unfortunately, that commitment to transparency does not extend to the taxpayers or voters of Mississippi. Many of the details, facts and figures surrounding this project – including the total potential price tag – remain hidden behind a veil of state government secrecy.
As late as November, even a member of Lauderdale County’s Board of Supervisors said he had not received any firm fiscal projections on which to base government budgets, 10 months after the project had broken ground.
“It should be unacceptable to Mississippi’s taxpayers that they have virtually no access to any data or details about a gigantic corporate welfare deal like this,” said Mozena. “Nothing good happens when you have CEOs and politicians making massive deals with public money behind closed doors, and it’s ridiculous to keep ‘private taxpayer information’ secret when people have legitimate questions about taxes that a company isn’t having to pay in the first place.”
A 2025 study by Good Jobs First identified Mississippi as one of 12 states that do not disclose how much revenue the state loses to data center subsidies.
Previous “Worst Economic Development Deal of the Year Award” winners:
2024: Charlotte, NC’s rushed and expensive NFL stadium renovation
2023: Michigan’s massive subsidies to a short-circuited Ford/CATL battery plant
2022: Georgia’s no-questions-asked subsidy of a Rivian electric vehicle factory
2021: North Carolina’s unnecessary subsidy of an Apple campus in the Research Triangle
2018: Amazon’s “HQ2” in New York City and Arlington, Virginia
About The Center for Economic Accountability:
The Center for Economic Accountability (CEA) is a nonpartisan and independent 501(c)(3) nonprofit organization that works to advance economic opportunity for all by promoting transparency, accountability and free-market-based reform of state and local economic development initiatives across America. Headquartered in Michigan, the CEA was founded in 2018.
For more information, visit https://economicaccountability.org/.