Land and data-center sites, North Carolina
Guides

Do data centers fund schools? What Texas, Virginia, and North Carolina records show

Data-center taxes can reach schools, but the route depends on the state. Texas school districts signed agreements with project owners under a program that has since expired. In North Carolina, the county levies the tax and its commissioners decide what schools receive, with no automatic earmark.

See how we work with landowners

Quick summary: This guide traces how data-center taxes and payments reach schools in Texas, Virginia, Ohio, and North Carolina. It is for residents, school advocates, and landowners who hear a school-funding claim at a hearing. The key point: an agreement, a projection, a tax levy, and a receipt are four different records, and only the last one shows money a school received.

Do data centers fund schools?

Data centers pay property taxes, and part of that money can fund schools. The path depends on state law. Texas let school districts sign value-limitation agreements with project owners. Virginia counties pool the revenue and appropriate a share to schools. North Carolina counties levy the tax and decide the school appropriation.

At a February 2026 Chatham County meeting, a speaker said of data-center tax revenue that “this revenue supports schools”. The minutes record the statement. They do not record a school payment. To check a claim like this, find who receives the money and which record shows it.

How Texas school districts made agreements with data-center owners

Under former Chapter 313 of the Texas Tax Code, a school district could agree with a company to cap the appraised value of its new property for school maintenance and operations taxes. The parties were the company and the school district. The county was not a party, and the records show no county transfer to a district.

The program expired on December 31, 2022. Limitations approved before then continue in effect under the law as it stood.

What the agreements could pay

The state’s program guidance separates three kinds of payment:

  • Revenue protection. The company replaces school funding the district loses because of the limitation.
  • Extraordinary educational expenses. The company covers a temporary rise in enrollment.
  • Supplemental payments. Extra payments to the district, which the law expressly limits. A 2013 amendment capped them at the greater of 100 dollars per student in average daily attendance or 50,000 dollars per year.

The guidance also requires the agreement to document anything of value the district requires as a condition of approval.

Two records involving data centers

District Project in the record What the record states
Klein ISD, 2006 A combined data and research-and-development center A one-time 170,000 dollar contribution on signing, plus annual credits for goods and services
Pecos-Barstow-Toyah ISD, 2022 A proposed data-center and semiconductor complex A modeled 47.9 million dollars in revenue-loss payments over the agreement

In Klein, the board’s findings packet names the project a data and research center. The agreement copy in the board packet titles the contribution a payment in lieu of taxes. Each year the company adds 15 percent of its net tax benefit, as a third party computes it, to a benefit account. The district can apply that balance to the company’s goods and services. It cannot redeem the balance for cash. The state’s 2017 program report classifies the project as research and development. It lists a payment-in-lieu provision of 1,139,821 dollars, revenue protection payments of 473,963 dollars, and 7,546,197 dollars of operating tax levied through 2015.

In Pecos-Barstow-Toyah, the board approved the agreement on December 19, 2022. The district’s filing includes a financial model with one scenario. It keeps the full project value taxable for debt service. The board found that the application fee it received covered only its processing costs. The state’s project record shows no qualified investment through 2023 and a limitation that starts in 2028. It reports 19,931 dollars of 2023 school property tax, the same with or without the limitation.

A promise is not a receipt

None of these records shows a school district receiving the payments.

  • An agreement copy states an obligation. The Klein copy came from a board packet, not a verified signed contract.
  • A state report field states what an agreement provides or what the state estimates.
  • A levy is the tax imposed. It is not proof of cash collected.
  • A financial model is a projection. The Pecos-Barstow-Toyah project had reported no qualified investment through 2023.

We found no itemized record of a supplemental benefit, a revenue protection payment, or project property tax that either district collected. The one receipt in the records is the application fee. That is a gap in the records we opened, not proof that the districts received nothing. A district’s audited financial report or payment certification closes that gap.

Watch for: A school-funding claim needs four answers: who pays, who receives, the fiscal year, and the record that shows the money arrived. An announcement answers none of them.

Why a district’s net gain differs from its gross taxes

A Texas district does not keep every dollar a project pays, because state school finance responds to local property value. Districts with local revenue above state levels pay funds into the Foundation School Program for distribution to other districts. Texas calls that payment recapture.

The value limitation interacts with that formula. The state removes the untaxed project value from the district’s property value. The state’s 2025 summary says lower district values typically bring more state aid or less recapture. Revenue protection then replaces a calculated loss. It restores funding. It is not new money on top.

A district’s net gain depends on enrollment, state aid, certified values, tax rates, collections, and the agreement terms. ### The newer Texas program

A newer Texas program, in effect since January 1, 2024, uses agreements among the governor, the school district, and the applicant. Each agreement must prohibit the applicant from making a payment to the district related to the agreement. The supplemental payments that Chapter 313 allowed are not part of new agreements. Ordinary property taxes still apply.

What Virginia and Ohio records show

Virginia and Ohio route data-center revenue through county budgets and city agreements, not school-district contracts.

  • Loudoun County, Virginia. The county recorded 699,818,945 dollars of data-center computer-equipment taxes in fiscal 2025. Its fiscal 2027 budget forecasts 879,094,354 dollars from that equipment and 417,666,456 dollars from data-center real property. The adopted budget sends 1,484,949,364 dollars of local tax funding to school operations, 105 million dollars more than the year before. That funding comes from pooled taxes, not a data-center earmark. The county also keeps a stabilization fund for shortfalls in data-center property tax revenue.
  • Prince William County, Virginia. A revenue-sharing agreement gives schools 57.23 percent of general revenue, or 1,115,429,297 dollars in fiscal 2027. The county raised the tax rate on computer equipment from 4.15 to 4.50 dollars per 100 dollars of value.
  • New Albany, Ohio. In 2018, the city council approved a data-center package with a 15-year real property tax abatement. City staff estimated that two school districts would receive about 1 million dollars a year combined. One of those districts, Licking Heights, reports 2,509,475 dollars of compensation received in fiscal 2025. It also reports 26,634,279 dollars of property tax lost to abatements by other governments. Both totals cover every abatement, not only the data center.

Forecasts are not collections, and a school share of pooled revenue does not trace to one taxpayer.

How North Carolina differs

In North Carolina, the county levies the property tax and decides how much goes to schools. We found no statute that earmarks data-center taxes for schools.

What a county keeps after incentive grants and equipment depreciation is a separate question. Data center tax revenue: what a North Carolina county keeps covers it.

Take action: If a buyer has asked about your land, read the county’s tax and budget record before the hearing does. Start with Is your land a data-center site?

How to check a school-funding claim

Each step has its own record.

  1. The tax. The county tax office shows the assessed value and the tax billed.
  2. The appropriation. The county budget ordinance shows what the commissioners gave the school unit.
  3. The receipt. The school unit’s audited financial report shows what it received.
  4. Any side agreement. The board minutes and the agreement text show any payment beyond taxes.

A company donation, an incentive grant, and a tax appropriation are different payments. Ask which one the speaker means. How to take part in a data center hearing in North Carolina covers how to put the question on the record, and Community benefit agreements for data centers: what residents can ask for covers payments outside the tax system. Data center jobs: what a project brings a community covers the jobs side, and Are data centers bad? The objections, checked against the record checks the other objections.

This page is not legal or tax advice. A school finance officer, the county finance director, or an attorney answers a specific case.

Key recap

  • Data-center taxes can fund schools, but the path depends on state law and the budget a governing board adopts.
  • Texas Chapter 313 agreements were between companies and school districts, not counties. The program expired in 2022, and a newer program bars agreement-related payments to districts.
  • The Texas records we opened state payments, credits, levies, and projections. They do not itemize money the districts received.
  • Recapture and state aid mean a Texas district’s net gain differs from the gross taxes a project pays.
  • In North Carolina, county commissioners levy the tax and set the school appropriation, with no automatic earmark for data-center revenue.

Questions

Do data centers pay school taxes in North Carolina?

Yes, indirectly. A data center pays county property tax, and the county commissioners decide how much of the county budget goes to schools. We found no law that ties the project’s taxes to a school.

Did Texas counties give data-center taxes to school districts?

The records we opened do not show that. They show agreements between companies and school districts under Chapter 313. The county was not a party to those agreements.

What is recapture in Texas school finance?

Recapture is the payment a Texas district with local revenue above state levels makes into the Foundation School Program for other districts. It is one reason a district’s net gain from a project is smaller than the taxes the project pays.

Can a North Carolina county copy a Texas school agreement?

Not as written. Chapter 313 was a Texas statute, and the North Carolina constitution reserves property tax exemptions to the General Assembly. A county can appropriate revenue to schools through its budget.

References

Primary sources cited on this page, in APA style.

Tell us what the project needs

Load, acreage, counties, and timeline. We reply with how we would run the search and where we would start.

Start a site searchTry the calculators