Goldwater Institute’s Bill Beard on data center regulation: ‘you’re gonna try and find an easier path’

Bill Beard, municipal affairs liaison for the Goldwater Institute, said March 19 that people understand from daily lives that more hurdles lead them to seek an easier path.

The topic is significant as Arizona continues to see rapid growth in its data center industry, which has become a major contributor to the state’s economy. According to Beard, “We don’t need to have a whole lot of super ivory tower analysis to figure this out. Most people know this just in their daily lives. If you’ve got more hurdles to climb over and jump over you’re gonna try and find an easier path,” according to a podcast audio interview.

Beard co-authored the Goldwater Institute report Data Centers: A Free Market Model for the Digital Future, released Jan. 28, 2026. The report urges Arizona officials to avoid excessive local regulations that could discourage investment in the industry. It describes data centers as key drivers of digital innovation and economic growth, noting that market-oriented policies have helped position Arizona as a national leader in the sector, according to the Goldwater Institute.

Data centers contributed $11.1 billion to Arizona’s gross domestic product in 2023, according to a Data Center Coalition economic impact study. The industry also generated $2.3 billion in state and local tax revenue between 2021 and 2023 and supported nearly 109,000 jobs. Phoenix has become one of the nation’s top data center markets, with capacity expected to continue growing. These facilities also provide significant property tax revenue that helps fund schools and local services, according to a Federal Reserve Bank of San Francisco blog post.

Greater Phoenix ranks among the leading U.S. data center markets and is projected to surpass 5,000 megawatts of capacity—a growth of more than 500%—driven by the state’s pro-business climate. Continued expansion depends on limiting local regulations that could deter investment; data centers are described as critical infrastructure supporting modern technologies such as artificial intelligence, according to the Goldwater Institute.

In Maricopa County alone, data centers paid at least $24.9 million in property taxes in one recent year, with much going toward school districts. Operators are adopting more efficient technologies that reduce water and energy use per unit of capacity while generally requiring fewer ongoing municipal resources than other types of development, according to county records reported by AZCentral.

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FULL, UNEDITED TRANSCRIPT

Leyla Gulen: [00:00:00] Welcome to the Grand Canyon Times podcast. I’m your host, Layla Golan. In this episode, we welcome our guest, William Beard. William Bill Beard is the Municipal Affairs Liaison at the Goldwater Institute, where he works with cities, towns, and counties to find solutions that protect taxpayers and promote a limited and.

Transparent government and while active in public work at the federal, state, and local levels, bill was a member of the Pima County Election Integrity Commission, having worked with people from both sides of the political aisle to draft legislation, improve procedures, and assist elected leaders at the state and county levels, and increasing transparency and accountability.

Bill welcome. 

Bill Beard: Thank you for the opportunity. 

Leyla Gulen: Opportunity. Yeah. It’s good to have you here with us. Um, today we wanted to talk about data centers. The, the global footprint of data centers is rapidly [00:01:00] expanding with more than, I think it’s 10,000 around the world and more being built all the time. For listeners who don’t think about infrastructure policy every day.

What exactly is a data center and why are they suddenly at the center of the political debate? 

Bill Beard: Well, first and foremost, data centers are not new. What may be new to the broader public is that the size of them has grown, and from a historical perspective, a data center is simply what folks that are, say, over the age of 40, 50, would remember as just.

Being the public library, what’s different is the information that you would find in that public library has now been digitized, and those ones and zeros of the information is stored in these large facilities that have access to millions upon millions of volumes of information. That one time was stored in a physical location in a [00:02:00] library books on shelves.

What now is occurred is that same information is no longer on a physical shelf in terms of the physical book, but it’s stored in the shelves, in the data centers, in those ones and zeros. What is different perhaps is folks may be misperceiving that a data center is somehow. Unique or new. They didn’t just fall down from outer space last week.

They are something that’s been around for quite some time. But as with all technologies, humanity has ever brought about, it has grown in size and efficiency in how we access that information. And I think that’s one. Part of the conversation that gets missed. When folks talk about data centers, they fail to fully come to grips with the reality that that information that say 10, 20 years ago was stored in their home computer or their business had a a room [00:03:00] full of the technology.

Because humanity likes to find new ways to build a mousetrap, and in this case, combine the resources. That used to be dispersed amongst a lot of different, uh, businesses and homes into one location. And then the access to that information has sped up dramatically and allowed folks to utilize the, the transformative power of that digital information and opened opportunities that are just as, as broad and as wide ranging as the human imagination could ever contemplate.

Leyla Gulen: Yeah, and growth is certainly accelerated. For, on a couple of accounts due to AI and cloud demand. So do you think that this has triggered increased scrutiny over these data centers? 

Bill Beard: Well, I, I think it, it’s two parts. One, from the public perception standpoint. There is a lot of [00:04:00] misinformation that’s out there that, oh, my power bill in my home or my business is going to somehow subsidize the data center, or, uh, they’re gonna take all my water, or the physical size of them is really just too big for me to contemplate.

Uh, a a data center is really no different than any other large, uh, manufacturing facility, large warehouse facility. It, it, it ha it has a physical location. There’s this. Pesky thing called property rights, and especially in Arizona with Prop 2 0 7, those property rights are to be honored by government not dismissed or change the rules and how you can maximize the profitability of your, your, your parcel of land by changing the rules midstream.

Uh, the, the, the reality is that without. The ability to maximize the ability to utilize your individual chunk of dirt, so to speak. Your ability to profit, your ability [00:05:00] to EE exist in a world where society is moving forward as opposed to stuck in the mud or regressing somehow is. Flies in the face of what human beings like to do with their imagination and their innate talents.

At the end of the day, a data center is no different than those large manufacturing facilities, et cetera. They have just as much right to build on their chunk of dirt and do the things that they feel are, are necessary to maximize their profits and and do what any any other business or property owner would do with their facility.

Leyla Gulen: Do you think that that’s a fundamental part of the conversation that’s missing? Because you do hear, as soon as one of these data centers is either going up or the company, whether it’s Google or whatever it may be, buys a parcel of land to build one of these data centers, you immediately. Hear people coming out of the woodwork and making the argument that this is going to [00:06:00] deplete resources.

In fact, you’ve had homeowners of data centers that have already gone up talking about how the water pressure has changed and what, what can we say to maybe allay some of those concerns, that there’s an infrastructure that has to support that infrastructure and maybe that’s not being met. 

Bill Beard: And I think you’ve touched on one of the key issues of this.

There’s a lot of irrational fear that is being promulgated by, for lack of a better term, political operators, that to see some political benefit from stirring up opposition to data centers. But again, a data center is no different than any other large scale business that you can contemplate. You know, the, the idea that somehow the data center is misusing resources, if you actually look at the data itself.

Based on inputs versus outputs, the resources that a data center requires in order to operate [00:07:00] efficiently and effectively in terms of maximizing the efficiency and effectiveness of those inputs versus outputs. Data centers have one of the highest returns and most efficient use of those resources.

Again, 10, 20 years ago when the same computing power was dispersed amongst a million different locations with businesses and private individuals in their homes utilizing their computers, you had large storage capacity in those computing systems that now is being concentrated into one location. Human beings have always had this knack for finding new and more innovative ways of utilizing resources in.

New ways to maximize efficiency so that the outputs are more productive for all parties involved. The idea that somehow my power or my water is going to change. Okay. If you are next door [00:08:00] to a new. Business that goes in, be it a mom and pop store that you know has a bunch of lighted signs outside the building, and because you’re right next to their connection, maybe you could make the argument that when they go online, my power or water is somehow changed.

That’s a far stretch. Again, utility companies are in the business of providing effective service to their customers regardless of who the customer is and their. Are rules and regulations that those power supply, water supply companies have to abide by, and they suffer the consequences if they don’t abide by those rules.

So sometimes just because you maybe have a problem in your. Particular location doesn’t discount or shouldn’t discount. The obvious reality that a new business going in has to comply with the same rules and same regulations as anybody [00:09:00] else. What is missing, and you touched on it earlier in this conversation, is.

Why is it that just because, quote unquote, the data center arrived in my neighborhood, somehow they should be treated any differently than any other property owner is. Flies in the face of reality and there, there are legal consequences if the neighbors or, and or the local municipality want to change the rules in midstream.

Leyla Gulen: Yeah. So if, if we’re looking at this strictly from a property rights issue, then how do we get the zoning or planning. Issues fixed. Because you say that the different, whether it’s the water department or the electrical department, whatever it may be, they’re obviously needing to be more equipped to handle all the load.

So how do you then shift more or less the onus from the data center onto those that are providing the resources? [00:10:00] To make sure that everyone within the zone is taken care of. 

Bill Beard: Right? And again, you have to understand when a, any, take any utility company, gas, water, power, you name it, they have certain rules in terms of providing all customers the same equitable access to whatever it is that the utility provides, be it power, water, et cetera.

If. If the demand for that power is going to fluctuate over time, they are, they have to do different things than someone that say has a static or fairly uniform usage of the, the consumable stuff from that utility. Let’s take power historically when electrification started occurring across the country.

Electric companies really didn’t have much motivation to provide power to every individual residential customer until there was a large consumer of power, say a smelting, [00:11:00] plant, large manufacturing facility, et cetera. That was. In that market that it was profitable for the electric power generating company to invest the capital necessary to build out the generating facilities, the transmission lines, et cetera, what happened as a consequence of that new large consumer of power coming into the market?

What happened is a large part of the overhead associated with the capital investment was subsidized by that large power consumer. In the case of data centers today, because their power demand is pretty uniform through a 24 hour period of time when new generating facilities, transmission lines, et cetera.

Come online to accommodate the new demand for power and I’ll, I’ll just throw out a number for discussion purposes. Let’s say the data center needs a hundred gigawatts of [00:12:00] power over time, and it’s pretty static in how it uses it. And the generating utility finds new generation capacity runs, new transmission lines, et cetera.

The overwhelming majority of those costs associated with that capital expenditure are going to be absorbed by that data center. And it’s no different than, say, overall demand in a neighborhood or a part of a community has increased over time because we’ve all got EVs, or we’ve decided to bring in a bunch of new technology and new.

Electronics into our homes and the overall demand has increased. You’re gonna provide more power to that section of community, and as such, everybody in that community will be paying in one way or another for that generating capacity. In my discussions with some of the regulatory agencies and some of the power generating facilities.

What they’re doing is when a data center say, [00:13:00] comes online and says, we need, again, just for example, purposes, a hundred gigawatts of power, they’re signing contracts that basically say, okay, the utility company will provide the a hundred gigawatts of power that are necessary. But if the data center doesn’t utilize that, the utility then has the ability to go out and sell that.

Excess capacity because it’s not being used by the data center on the open market. And basically the cost is not shifted to anyone other than the final consumer of that power. So in this instance, the data center basically u use it or lose it, and if the generating facility doesn’t have the ability to sell it to the data center, it will sell it on the open market and frequent market principles will apply.

Leyla Gulen: Yeah, well, what happens when governments start deciding which lawful uses of private property are acceptable versus unacceptable? 

Bill Beard: Well, what does [00:14:00] history teach us in those situations when governments at the federal, the state, or the local level, add more burden to individuals? Be they individual, private, residential customers or businesses?

They tend to and, and we, I believe we use it in our data center policy piece, bubble wrap mentality. If you think about it, a bubble wrap is designed to hold things in place while they’re being transported. If government’s regulatory system. Adds so many layers of bubble wrap that it basically freezes individuals and businesses in place.

The ability to maximize your profitability of your chunk of dirt goes to zero. And again, historically, when you’ve got more government regulation, when you’ve got more requirements and hurdles that. Anyone has to jump over in order to just make a living. They tend to stop doing the [00:15:00] things that are required to jump over the hurdles and go find somewhere else where the, the hurdles don’t exist, or there’s a lot fewer or a lot smaller hurdle height to overcome.

So. We don’t need to have a whole lot of super ivory tower analysis to figure this out. Most people know this just in their daily lives. If you’ve got more hurdles to to climb over and jump over, you’re gonna try and find an easier path. 

Leyla Gulen: Yeah, sure. And what risks do states run if they send a message that this kind of investment is not welcome?

Bill Beard: Well, the rest of the world is the supply and demand always went out. Doesn’t matter how many rules and regulations government tries to put in place, the free market tends to figure out a way to satisfy demand, and if a. Given state, let’s say, decides to base to say, we don’t want data centers here. And I, I believe under [00:16:00] current plans, both the state of Maryland and the state of Minnesota have legislation contemplated that basically says you can’t build data centers here, period.

Leyla Gulen: Yeah, 

Bill Beard: those states are gonna find that they’re gonna be left in the dust historically and economically in terms of what this transformative technology with data centers is bringing about. Um, you can, as the old saying goes, you can either get on board or be left in behind in the dust and the world demand is such that.

We will have the ability to utilize data centers. Whether a local community wants to come on board or not, they’re gonna be left in the dust. The irony is that a lot of the opponents of data centers love to get online on their smartphones and complain on TikTok and whatever other social media they, they care to post about it.

But forgetting of course, that without those data centers, their ability to do those things through social media would be impossible. [00:17:00] 

Leyla Gulen: Of course, yes. It all comes around full circle, doesn’t it? 

Bill Beard: Yes. 

Leyla Gulen: Yeah. Do you think policymakers underestimate how quickly technology and industry practices evolve? 

Bill Beard: I, I don’t know that it’s so much underestimated.

I think they, they fail from a policy planning standpoint to realize that. Being in reactive mode is not a good sound policy decision making process because when you are reactive, you’re probably gonna be letting fear and, and, and doubts determine the outcome rather than. What is good in the, in, in the benefit of all of the people that live in my community, live in my state, live in my nation?

What are good policies that you can put in place that allow the market to determine what actually happens? I, I, I’ve read of in a number of situations where let’s say a data center went [00:18:00] in and it wasn’t fully utilized for whatever reason, well. The, again, market forces have a way of evening the, the playing field out.

Was it simply because there wasn’t a need for the data or the business model of that particular owner of that particular property? Had some bad plans, ended up pricing themselves out of the market. And somebody else that was down the street or next door or the next county over had a better business model plan, could put it on the market cheaper, and the consumers decided to go with the cheaper business model and benefited everybody in the process.

So again. Governments that wanna put up a whole bunch of hurdles in the way of doing business, they’re only to to, to use the old phrase, cutting off their nose, spite their face. You have to understand that good policy is based on sound rational decision making. One of the main reasons we wrote the [00:19:00] paper that we did was to reestablish as part of the conversation the idea that private property rights are important.

They should never be discounted. And free market principles that have the lowest number of hurdles and the shortest height of those hurdles. Those communities do far better economically, socioeconomically pick your demographic. They will succeed far more than the communities that have a whole bunch of hurdles and a whole bunch of regulations that say, well, we’d like you to do it, but you’ve gotta do all these extra things beyond what the neighboring community, the neighboring state wanna do.

Leyla Gulen: So in your view, what should government’s role be when it comes to data center development? 

Bill Beard: Stop saying no. That’s first and foremost because you’re gonna be left in the dust if you do. Second is remind. Everybody. That’s part of the conversation that private property rights are important, especially here in Arizona.

That [00:20:00] pesky thing called Prop 2 0 7 tells government you put a bunch of regulations in in place while someone’s in the middle of the process. The state needs to compensate those property owners. And the last thing is just free market. Low hurdle, low entry, low barrier regulations are the way to go because in the end.

Uh, at the end of the day, your communities, your state, your nation, your economies, the, the, the overall wellbeing of all of your, all the folks that live there will be vastly improved with lower barriers and free market principles. Ruling the day rather than a bunch of people sitting in a closed room with no windows deciding, well, this is the way it’s gonna be.

And fear and political benefit will determine the outcome more than anything else. 

Leyla Gulen: Yeah. So it sounds like the way we handle data centers today definitely shape the nation’s technological [00:21:00] competitiveness tomorrow, in addition to its economic health. 

Bill Beard: Amen. 

Leyla Gulen: Yeah. Yeah. So, so what happens then to innovation when rules become subjective or politically driven?

Bill Beard: History is a, is a, is a real good guide on that. And when, when you arbitrarily change, what would otherwise be? Supply and demand. Uh. Processes, you’re going to have bad outcomes for all parties involved. You may end up with a few, and I mean very few people benefiting for their purposes because they’re politically connected, rather than everyone gets to fight it out in a free market.

In fully transparent, let the best mousetrap builder win. 

Leyla Gulen: Where does the Goldwater Institute fit into the conversation and, and why? Are you engaging in this now? And, and how do others who happen upon [00:22:00] either this podcast or developing an interest in this subject matter, follow and ask questions? 

Bill Beard: Well, the No Policy Institute sets out just to throw something out there just to, just for kicks and giggles, in the case of the Goldwater Institute, we are a free market institute center, right?

More libertarian reading, uh, leading. Leaning in what we do around here. And when we started doing the research on this particular subject, we realized that the, the one thing that seemed to be missing from the conversation across the nation and uh, to some aspect across the world was the idea that small.

Low barrier entry free market principles were missing from a lot of the conversation. And the other part of it was those private property rights, um, the number of news articles you can find going back several years now, um, regardless of what part of the, the country you’re looking at, the news articles, [00:23:00] just simple things like even acknowledgement from elected officials and policy people working for government at the federal, state, and local level.

Completely dismissing or dis discarding any notion that property rights should be part of this conversation. And so with those two basic ideas in mind, we tried to go out and look for what is the reality on the ground? What is the reality of things like the utility supply, the, the developers of these properties?

The, the u users of the data centers themselves, what is it they’re seeing in, in this whole discussion? And we published the paper that we did last week. 

Leyla Gulen: Yeah, yeah. Well, for people who wanna follow this and either have questions or like to get in contact with you, where should they go? 

Bill Beard: Goldwater institute.org.

My email address is wBeard@goldwaterinstitute.org. We’ve got our data center paper published on the [00:24:00] website. Any follow up questions? I’m happy to answer any that I can. I’m not an attorney. I don’t give legal advice, but, um, having dived into these waters and done some research, there’s a few things that I have come to believe are, are, are true in the case of the dis, the larger discussion.

And I’m happy to either answer direct questions or if I don’t have an answer, point them in the direction of someone that might. 

Leyla Gulen: That’s great. Bill Beard, thank you so much for joining us. This has been a fascinating conversation. 

Bill Beard: Thank you.