Maryland Tech Council study shows how data centers could drive job growth and close budget gap without tax hikes

Maryland’s data center sector could emerge as a critical driver of job creation, tax revenue growth, and economic diversification, according to a new report from the Maryland Tech Council (MTC). The study, conducted by Sage Policy Group, concludes that large-scale data center development can deliver outsized fiscal and employment benefits to the state without requiring tax increases or placing heavy demands on public services. It arrives at a pivotal time for Maryland, which is currently ranked 40th in the United States for five-year job growth and is on track to face a $3 billion budget deficit by Fiscal Year 2030.

The report quantifies the economic potential of a typical 800,000-square-foot data center project in Maryland. During the construction phase, such a facility is estimated to support 5,000 direct and indirect jobs, generate $775 million in economic activity, and contribute around $18 million in tax revenues. Once operational, the same facility would sustain nearly 500 permanent high-paying jobs and deliver $14 million in annual state tax revenue. These numbers underscore the role of data centers as long-term economic assets rather than short-lived construction booms.

Kelly Schulz, Chief Executive Officer of the Maryland Tech Council, said the findings should prompt state policymakers to make data center development a strategic economic priority. “As Maryland adapts to new challenges to its economy and tax base, we need to support industries that can create tens of thousands of high-paying jobs and significantly bolster tax revenues,” Schulz stated. “The data center industry does exactly that, without the need for tax increases. By creating and executing a strategic plan for data center development, Maryland can meaningfully address its structural budget challenge, put more Marylanders to work in good-paying jobs, and build the digital infrastructure required to remain an American technological leader.”

Why data centers matter for Maryland’s economic future

The Maryland Tech Council’s findings are especially relevant given broader national and global trends. Across the United States, the technology sector is expected to invest as much as $500 billion into artificial intelligence and data center infrastructure by 2030. This investment wave is driven by accelerating AI adoption, exponential growth in cloud computing, and the need for more secure and sustainable digital storage. States that position themselves as attractive destinations for data center development stand to capture a substantial share of these investments, which can have compounding effects on local economies.

Maryland, however, has historically been at a competitive disadvantage compared to states like Virginia, which has aggressively built out its data center capacity over the past decade. Northern Virginia’s “Data Center Alley” in Loudoun County is now home to one of the world’s largest concentrations of such facilities, providing a model for high-density development paired with strong fiscal returns. By contrast, Maryland’s market share has been more fragmented, in part due to regulatory complexities and infrastructure constraints. The MTC report suggests that with the right policy adjustments and investment incentives, Maryland could attract a wave of large-scale projects and close the competitiveness gap.

High-quality job creation and the multiplier effect

One of the report’s most striking findings is the quality and scale of employment supported by data centers. The average salary for a data center employee in Maryland approaches $100,000 annually—around 55% higher than the state’s current average wage. These jobs often include roles in operations, engineering, security, and IT systems management, providing a stable employment base in a sector resistant to offshoring.

Moreover, the economic ripple effect of data center jobs is substantial. For every direct job created within a data center, more than two additional jobs are generated in supporting industries, from construction and equipment maintenance to catering and local transportation. This multiplier effect is a key reason why data center projects often have a disproportionate impact on local economies compared to other forms of commercial development.

The construction phase is particularly impactful for Maryland’s building trades. The report notes that every 275 square feet of data center space supports one construction job. This is notable given that Maryland’s construction sector has shed around 13,000 jobs since 2019, in part due to the slowdown in large infrastructure projects. Data center construction could provide a sustained source of demand for skilled labor, helping to stabilize wages and employment levels in the industry.

Fiscal benefits without raising taxes

In an era of taxpayer resistance to new levies, the fiscal profile of data centers offers a politically palatable way to expand government revenues. According to the study, one million square feet of operational data center space generates more than $16 million in annual state revenue. Importantly, data centers place minimal demands on public services such as schools, public safety, and transportation infrastructure compared to residential or retail developments. This low service requirement means their net fiscal impact is significantly higher.

The construction phase delivers a notable windfall as well. Each square foot of data center construction generates approximately $10 in sales tax revenue. The report cites a 2023 Sage Policy Group analysis of a proposed 16 million-square-foot development in Frederick County, which projected more than $40 million in annual tax revenue for the county alone.

Public sentiment aligns strongly with the idea of revenue generation without tax hikes. Surveys show that 77% of Marylanders oppose property tax increases, 76% reject income tax hikes, and 73% are against raising sales taxes. Given this resistance, data centers could be positioned as a key part of the state’s fiscal strategy, providing recurring revenue while avoiding politically unpopular measures.

Environmental advantages and sustainability positioning

Maryland’s relatively clean energy profile also enhances the environmental case for hosting data centers. The report points out that Maryland produces between 6% and 71% fewer carbon emissions per megawatt-hour of electricity than its neighboring states. This gives the state a competitive advantage when it comes to attracting companies that are under pressure to meet corporate sustainability targets.

By situating energy-intensive facilities in Maryland rather than in higher-emission states, operators can reduce their carbon footprint and align with the environmental, social, and governance (ESG) commitments that are increasingly influencing corporate investment decisions. The MTC argues that this environmental positioning could be a key differentiator as hyperscale operators and cloud service providers select sites for new facilities.

Bridging the budget gap and attracting investment

Maryland’s projected $3 billion budget shortfall by 2030 underscores the urgency of finding new revenue streams. Data centers offer a rare combination of high fiscal yield, minimal strain on public services, and alignment with the state’s broader economic development goals. If Maryland can streamline permitting, enhance infrastructure readiness, and create competitive tax incentives, it could attract a share of the $500 billion in expected U.S. data center investment over the next five years.

Industry analysts note that jurisdictions with proactive policy frameworks tend to attract long-term commitments from data center operators, which in turn encourages the development of related industries, such as fiber optic manufacturing, renewable energy generation, and AI-driven analytics services. This clustering effect could help Maryland build a technology corridor that rivals established hubs in Virginia, Texas, and Arizona.

The road ahead for Maryland’s data center strategy

The MTC report stops short of prescribing a specific legislative package but emphasizes the need for a strategic, coordinated approach involving state agencies, local governments, and industry stakeholders. This could include targeted tax incentives, zoning reforms, and infrastructure investments in power and fiber connectivity.

Analysts also highlight the importance of workforce development initiatives to ensure Maryland residents are prepared to fill the high-paying technical roles that data centers require. This includes partnerships between data center operators and local universities or technical colleges to create training pipelines in IT systems, electrical engineering, and environmental systems management.

While data center growth is not without challenges—such as energy demand management, community engagement, and land use planning—the MTC report positions the sector as one of the most promising avenues for Maryland to generate high-value economic growth in the next decade. If the state moves quickly to implement a competitive strategy, it could capture a leading role in the nation’s rapidly expanding digital infrastructure economy.