TOPEKA — Cindy Holscher and Ty Masterson sat about 20 feet apart on the floor of the Kansas Senate on the final day of the 2025 legislative session as they voted for the bill granting a 20-year state and local sales tax exemption to developers of massive data centers.

In 18th months since a bipartisan coalition of 101 members of the Legislature and Democratic Gov. Laura Kelly embraced the bill championed by artificial intelligence and information technology lobbyists, public skepticism about Kansas’ welcome mat for data centers became a flashpoint in the 2026 race for Kansas governor. The blowback was reflected in a Gallup poll showing 71% of Americans didn’t want to live near a data center.

Holscher, the Democratic nominee for governor, and Masterson, winner of the Republican gubernatorial primary, responded differently to scrutiny of their April 11, 2025, votes for the bill granting incentives to data centers.

Holscher said the groundswell of criticism prompted reconsideration of her vote and led to her decision to seek a freeze on data center projects until more meaningful financial and environmental boundaries were in place. She criticized the IT industry’s expenditure of about $1 million to support Masterson’s gubernatorial campaign. She highlighted Masterson’s dinner meetings and acceptance of political contributions from the trade association representing Google, Meta, Amazon, X, OpenAI, eBay, Netflix, Kalshi, StubHub, Airbnb and TikTok.

“This is just more of the same corrupt, pay-to-play politics that people are so sick of,” Holscher said. “Ty Masterson works for his wealthy donors and their lobbyists, not for regular Kansans. Meanwhile, the rest of us pay the price as the cost of living goes up and our budgets are stretched thinner and thinner.”

Masterson defended Senate Bill 98 and argued the state law contained restrictions that would protect communities and that, ultimately, local elected officials possessed authority to decide whether data center projects came to town. Barber County, which approved a Google-affiliated project in August, should be free to link its economic future to a data center, he said.

He denounced Holscher as a political flip-flopper on an issue important to Kansas voters.

“However the winds blow. She was for it before she was against it,” Masterson said. “My position has never changed. It is about growth and opportunity for our kids.”

The tax break was created to benefit companies investing at least $250 million over five years in a Kansas data center project that would serve growing demand in the United States for artificial intelligence. For a quarter-billion dollars, investors in Kansas could avoid sales tax on construction, equipment and maintenance of data centers. That lure was available on the condition data center investors created 20 jobs within two years, bought electricity from local utilities for 10 years and committed to conserving water used to cool systems in data centers

The House voted 85-37 for SB 98, and the Senate concurred 26-8. Kelly signed the bill in April 2025. The package was designed to serve as a magnet for hyperscale data centers based on the assumption no data center would locate in a state without the sales tax exemption. The bill began its legislative journey as Senate Bill 51, which was introduced at the request of the powerful trade association NetChoice.

MASTERSON’S PLEDGE

Masterson, the Republican serving as Senate president, was embroiled in a caustic primary campaign for governor when he issued his “Kansas Ratepayer Protection Pledge.” The document was a response to public dissatisfaction with emergence of at least a dozen data center proposals in Kansas.

He said data centers wouldn’t blend well in some communities, but the opportunity to secure new property tax revenue might be a good fit elsewhere.

“There’s places that don’t make sense, and there’s places that do make sense,” he said.

In the campaign pledge, Masterson said he would make certain as governor that data center developers paid the full cost of electricity necessary to operate the energy-sucking facilities. He pointed to a section of SB 98 prohibiting data centers from making use of a 40% discount on the price of electricity typically available to companies making huge investments in the state’s economy.

Masterson promised to oppose the use of eminent domain to acquire land for data centers and vowed to protect the state’s water resources.

He said he supported the Kansas law requiring a special review to prevent data centers from deploying technology from China and other countries that might want to harm U.S. national security. That piece of the puzzle echoed a requirement backed by President Donald Trump, who endorsed Masterson’s campaign for governor.

“President Trump is right, America wins the AI race or we hand it to China,” Masterson said. “But folks build here on our terms, or they don’t build here.”

In terms of data center reform, Masterson said he would urge passage of legislation requiring back-up power to be built to strengthen the grid in an emergency. He would place in statute a mandate that the Kansas Corporation Commission confirm in every utility rate case that data centers were paying the full cost of electricity used to operate.

HOLSCHER’S PERSPECTIVE

Holscher said she proposed a pause on data center development projects because it was evident the “beautiful picture of economic growth” presented in 2025 by IT lobbyists and organizations didn’t take into account the contrary views of some Kansans.

“Since that time, things look a lot different,” she said. “I’ve done about 80 town halls across the state where I listened to people. The people are worried. They don’t want their water depleted. They don’t want their utility rates going up. Farmers don’t want viable land taken out of production.”

Holscher said Kansas could be a player in the data center development boom, but protections must be in place to prevent projects from depleting or polluting the water supply. The details of electricity consumption by data centers had to be revisited to guarantee regular consumers’ utility bills didn’t surge, she said.

In other parts of the country, she said, jobs promised by data center developers never materialized. The Kansas data centers should be constructed with union labor, she said. Local governments are open to a statewide reset to rules on data centers, she said.

“What I’m hearing is that they want help from the state,” Holscher said. “I believe in local control, but they want help from the state in terms of helping to find these guardrails.”

She said Masterson accepted an $8,000 campaign donation from Steve DelBianco, president and CEO of NetChoice, four months after the Kansas data center bill passed. The NetChoice firm later delivered an $8,000 check to Masterson’s campaign for governor.

That was part of nearly $1 million that IT and AI interests invested in Masterson’s campaign for governor, she said.

“His campaign was fueled by, you know, these big tech companies pushing him through that primary,” Holscher said. “You cannot count on Ty Masterson to put guardrails in place when these big tech companies essentially bought his campaign.”

• Tim Carpenter is a journalist with the Topeka-based news service Kansas Reflector.