AUSTIN — Data centers have become a major issue in the 2026 Texas governor’s race, with Democrat Gina Hinojosa and Republican Gov. Greg Abbott each warning that the facilities must not shift rising electricity, water or infrastructure costs onto households and small businesses. Hinojosa, an Austin state representative seeking the Democratic nomination, spent the summer visiting rural communities, including Granbury, where residents have raised concerns about nearby data-center projects. She said some residents who identified as Republicans told her they were reconsidering their party affiliation because of the issue. “What is happening with data centers is an example of the one fight of our time,” Hinojosa said during a virtual news conference after the visits. Her proposed policies would require data centers to create American union jobs, prohibit nondisclosure agreements, and demonstrate that projects would not increase household electricity or water bills. She also wants to end tax subsidies for data centers and make water contracts unenforceable if they threaten a community’s water supply. Hinojosa has called on Abbott to impose a moratorium on new data-center development until the Texas Legislature returns for its 90th session early next year. Abbott has not called for a statewide moratorium. Instead, he has directed state agencies to tighten oversight of proposed projects. In June, he instructed the Public Utility Commission of Texas to require data-center companies to fully fund their electricity needs and ensure grid-upgrade costs do not fall on ratepayers. He later ordered the commission to audit proposed data-center projects and require companies to provide more information about their expected electricity and water use before connecting to the grid. In September, Abbott directed the Texas Water Development Board to penalize data centers that violate state water-use reporting laws. “Data centers must bring their own power,” Abbott said in June. “They must reuse their own water, and they must reduce electricity costs for residential customers as well as small business customers. Those are bottom line expectations.” Abbott has also proposed eliminating tax breaks for data-center companies and limiting construction in rural neighborhoods. His campaign says the governor is acting to ensure companies pay their own way and protect Texas’ water and power systems. The candidates have attacked each other’s records. Hinojosa has criticized Abbott for signing House Bill 2712 in 2015, which created a 20-year sales and use tax exemption for large data-center projects. She also points to Abbott’s support for a $40 billion Google investment announced last year to expand artificial-intelligence infrastructure and build data centers in Texas. “Greg Abbott has no credibility when it comes to reining in the data centers,” Hinojosa said. “The reason why they’re all here is because he invited them in with some of the richest tax breaks in this country.” Abbott’s campaign, in turn, has cited Hinojosa’s votes as a state representative. In 2017, she voted for legislation allowing certain jobs supplied through third-party employers to count toward employment requirements for the state’s data-center tax incentive program. In 2023, she voted for a bill that would have extended the exemption to connected data-center campuses. That bill did not pass the Texas Senate. “Gina Hinojosa’s accusations are a confession,” Abbott campaign press secretary Eduardo Leal said. “When she had the chance to stand up to data centers in the Legislature, she repeatedly voted to support their tax incentives.” The dispute reflects a broader question facing Texas communities as artificial-intelligence development accelerates: whether economic growth from large computing facilities justifies the demand they place on the electric grid and water supplies, and who should pay for the public infrastructure needed to support them. Those questions are likely to remain central when lawmakers return to Austin and as voters choose between the two candidates.