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Announcing a $20 billion economic development deal last June — the largest, by far, in Pennsylvania history — Gov. Josh Shapiro couldn't help but crow a bit. "This is the kind of deal that every state wants, every state is out competing for," he said. "But Pennsylvania won this deal. We got it done."
Yet in the year since, it has also caused Shapiro no shortage of grief. That is because it involves two massive Amazon data centers in the state for cloud computing and artificial intelligence. And public opinion on data centers is souring considerably.
In an Emerson College poll of 2,000 Pennsylvania adults released in December, 42% of respondents said they would oppose a data center in their community, while only 34% said they would support one.
So, last month, Shapiro, a Democrat, rolled out a new set of what he called "strict guardrails to hold data center developers accountable." The Governor's Responsible Infrastructure Development (GRID) standards require companies to certify that they will either provide their own energy or pay 100% of the costs to keep local utility rates affordable; that they will promote "transparency and community engagement"; and that they will support the workforce and protect the environment.
An aerial view of Project Boson in Archbald, PA, is pictured in close proximity to The Highland's neighborhood as well as Valley View High School (top left), Wednesday, April 15, 2026. Project Boson will replace an auto parts junkyard with a nearly 620,000-square-foot data center. Local residents have raised significant concerns.
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They are all laudable goals. But they complicate one of the governor's most cherished economic development priorities: cutting red tape.
"Pennsylvania had a bit of a reputation as a slower and more difficult state to do business in," said Pennsylvania Secretary of Community and Economic Development Rick Siger in an interview. "We needed to make really fast progress to address that issue."
One measure they took was to catalog all 2,400 licenses and permits the state issues, set a reasonable time frame to process them, and offer a money-back guarantee if they are late. The state boasts a nearly 72% reduction in overall permit processing times in just the past year.
A simple business license, which used to take about eight weeks to obtain, can now be processed the same day.
Shapiro also signed an executive order in 2024 establishing a so-called "Fast Track" program for the biggest projects — which Siger called a "concierge customer service layer" for the most complex developments.
"It's about speed, certainty, predictability for companies developing in Pennsylvania," he said.
Some communities are pushing back
Economic development experts say cutting red tape has emerged in 2026 as the most important factor in where companies choose to build.
"The biggest thing, I think, is speed to market," said Tom Stringer of Stringer Site Selection and Incentives in New York, which has advised clients in a variety of industries, including aerospace, defense, and automotive. "We're really only looking at those states that have ready sites to go, that are pre-permitted, infrastructure in place, incentives lined up."
Dealing with community opposition to a project runs counter to that, said site selection consultant Larry Gigerich, managing executive director of Ginovus in Indianapolis, and chairman of the Site Selectors Guild. "An early screening mechanism for us is places that are starting to really push back on economic development, so we're factoring that in," he said.
Donny Carey is pictured on his porch in Archbald, PA, Wednesday, April 15, 2026. Archbald is experiencing a contentious boom in proposed AI data center projects, with over 4.7 million sq ft proposed across 29 buildings. Major projects like Wildcat Ridge (14+ buildings) and "Project Gravity" face intense local opposition over power, water usage, and noise.
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The friction is growing, Gigerich said, and it is not limited to data centers.
"A lot of places are starting to push back on economic development, really for the first time in a long time," he said. "Not just data centers, but manufacturing projects, distribution centers. It's definitely going to be a challenge going forward in how we address that."
Siger denied that the GRID standards, which Shapiro is seeking to codify in state law, will be an impediment to development. "We are not adding a regulatory layer. We are saying, 'Here's what we think good is'."
At the same time, he said, the state's new emphasis on speed is not coming at the expense of oversight.
"The rules of the road are the same, and by the way, when we talk to companies, they're kind of fine with that," he said. "What they want to know up front is, what are the rules of the road? What do we need to achieve, what is the path to get there, and how long will it take?"
Josh Shapiro's complicated political calculus
The approach has already paid some major dividends for Pennsylvania beyond the Amazon deal.
In January, Eli Lilly announced it would invest $3.5 billion to build a manufacturing campus for injectable medicines in Lehigh Valley. CEO David Ricks said Pennsylvania was among some 300 locations vying for the project. "The commitment to rapid permitting, availability of land, logistics, and an ecosystem around us that really supports what we do, were really defining points in making this decision," he said.
The project is expected to create more than 800 permanent jobs, and another 2,000 construction jobs.
But the relentless focus on development — and data centers and artificial intelligence in particular — are complicating things for Shapiro, who is seeking a second term as governor in 2026 and is frequently mentioned as a presidential candidate in 2028.
His Republican opponent in this year's gubernatorial race, State Treasurer Stacy Garrity, is calling for what she calls a "pause" on major data center development. In a May 28 post on X, she slammed Shapiro's approach.
"Josh Shapiro rolled out the red carpet for massive data center projects. Now that communities are raising concerns about water usage, energy demands, noise, zoning, infrastructure, and effects on farm land, he's scrambling to do damage control," she wrote.
Stuart Lacey, founder and CEO of Labrynth, which uses AI to measure permitting times and works with governments and businesses, said reforms need not be a partisan issue.
"Anything that removes the friction behind driving the country forward is obviously on the top of the agenda," he said. "It's not party politics. It's just good business, and it's good for people."
Labrynth developed a "Red Tape Index" to publicly measure progress, and the company is providing data on permitting times for this year's CNBC America's Top States for Business study.
In Pennsylvania, they say that streamlining the approval process is part of a much larger goal.
"We want to be a destination of choice for business," Siger said.
Among the goals identified in the state's official economic development strategy: "Become a Top 10 State for Business" in CNBC's rankings.
CNBC will unveil the 2026 America's Top States for Business report — our 20th year — on July 15.
