City officials say future property taxes and electricity franchise fees could provide permanent revenue as construction-related income fades
SHREVEPORT, La. — Shreveport officials are projecting that data center development could eventually generate roughly $8 million to $11 million annually in additional property tax and electricity franchise fee revenue for the city, providing one of the clearest estimates yet of the projects’ long-term impact on city finances.
Chief Administrative Officer Tom Dark disclosed the estimates Monday during a Shreveport City Council administrative conference as council members questioned how the city would sustain proposed pay increases for police and firefighters after temporary construction-related revenue ends.
Dark said the city plans to initially use building permit revenue associated with data center construction to help fund the increases.
“We have proposed to pay the initial part of this from building permit fees that we’re getting and are going to receive from both the Caddo Parish data center and the data center inside the city of Shreveport,” Dark said.
The longer-term plan depends on two recurring revenue streams: property taxes and franchise fees generated by the large amount of electricity the data centers are expected to consume.
“The recurring funds are from two sources that the data centers will also provide down the road,” Dark said.
Dark cautioned that final property tax collections cannot be known until assessments are completed, but provided the administration’s working estimate.
“No one will know until the actual assessments are done what the property tax bills are, but we’re estimating, you know, well in the five to six, seven million range for those,” Dark said.
The city also expects additional franchise fee revenue from SWEPCO as electricity consumption increases.
Dark said Shreveport currently receives about $15 million annually in SWEPCO franchise fees, with roughly $6 million going to the general fund and some of the remainder going to the street fund.
“We feel like given what they’ve been talking about, three to four million there is not an unreasonable number,” Dark said.
Taken together, the administration’s estimates indicate approximately $8 million to $11 million in additional recurring annual revenue from the two sources.
Dark said the city deliberately structured its compensation proposal so anticipated recurring revenue would exceed the cost of the pay increases.
“I think what we’ve tried to do is to make sure that the combined number was bigger than the eight-plus million we were doing for pay,” Dark said.
The timing is important because building permit revenue is temporary. Dark said the administration expects property tax collections to increase as the projects are completed, allowing recurring revenue to replace construction-related income.
“They will be paying quite significant property taxes as this goes along, and those will peak down the road in a couple years,” Dark said. “About the time the building permit revenue kind of passes on, we will then be to the recurring revenue.”
The discussion came as the council considered proposed new pay scales for police and firefighters that would take effect Dec. 1.
Both groups would receive a 6% base increase. The proposals also include additional incentives based on education, certifications, position and service.
Councilman James Green questioned the administration about whether the city’s other employees could receive raises sooner than currently proposed.
The 2027 budget proposal includes a 3% raise effective March 1 for classified employees and separate parity increases beginning Jan. 1 for more than 400 classified employees identified through a compensation study as among the city’s most underpaid workers.
Green asked whether the city could calculate the cost of providing raises to the remaining workforce at the same time the public safety increases take effect.
Several council members expressed similar concerns during the discussion, and the administration agreed to provide cost estimates for accelerating the raises.
The new revenue estimates provide additional detail about the financial impact of the unprecedented level of data center investment underway in Northwest Louisiana.
Amazon has announced plans for $18 billion in investment across three Northwest Louisiana data center campuses, including a $6 billion campus at Resilient Technology Park in west Shreveport.
BIZ Magazine reported last week that construction activity is already beginning to appear in local tax collections. Bossier Parish reached its full-year sales tax projection by September, while Caddo Parish has also reported increased collections associated with major construction activity.
Those construction-related revenues, however, are distinct from the recurring revenue Dark outlined Monday.
The administration’s estimates provide an early indication of what the projects could mean for Shreveport finances after construction is complete and the data centers become fully operational.