The A.I. Boom Boosted Teacher Pay in a Rural County. Can It Last?

by Curtis Jones
0 comments

A couple of weeks after schools let out for the summer in rural Richland Parish, La., teachers there got the biggest year-end bonuses they had ever seen.

The money was tied to a spike in sales tax revenue generated by an enormous Meta data center under construction near Rayville, the parish seat. This year, many teachers got a deposit of nearly $51,000 — more than most of them make in annual salary.

“It really feels like something that happens to people in movies,” said Lauren Yates, 32, who teaches first grade at an elementary school in Start, a small community just west of Rayville.

Data centers, many powering artificial intelligence, often come to underserved rural areas with promises of revitalization, a meeting of the superhot tech economy and the flagging agricultural sector. The Richland Parish windfall is one of the most striking examples.

But while local officials are delighted, critics say this is not a panacea.

Teachers’ bonuses in Richland Parish fluctuate every year in accordance with a decades-old ordinance that directs 1 percent of local sales tax revenue to educators. The huge sums this year come partly from the tax revenue generated by the thousands of workers constructing the center — whose day-to-day purchases have juiced up the local economy — and partly from an annual payment Meta is making to the parish.

But many of the workers are likely to leave in the next few years, ending the tax boom. And the Meta payment, which amounted this year to about $22 million, represents only a fraction of the taxes that a company would normally pay to build in the area.

That is a significant gap in a parish where nearly a quarter of the population lives below the poverty line and teachers’ salaries are low, even by state standards. Louisiana already has one of the more regressive tax systems in the country, in part because it relies heavily on sales tax revenue instead of income taxes to fund public services.

Sandie Lollie, the president of the local branch of the American Federation of Teachers, applauded the bonuses, but said they did not do enough to chip away at decades of underinvestment in Louisiana’s education system.

“When you see a check like that, you think, ‘Wow, they just hit the mother lode,’” she said. “That’s so far from the truth.”

Recent polls show that Americans of all political stripes have been souring on data centers. The largely windowless facilities, which guzzle water and power and do not require much human labor once operational, have turned into hulking avatars of the powerful tech companies making big bets on A.I.

Still, most states have experimented with policies to attract data centers. Louisiana is one of 38 states that offer tax incentives for the facilities, according to a report this year from the National Conference of State Legislatures.

Under a recent state law meant to attract such centers, Meta, which owns Facebook and Instagram, is exempt from paying Louisiana the 5 percent sales tax on the construction project, and from paying a similar sales tax of 4.25 percent that would ordinarily be levied by Richland Parish.

Instead, it is paying the parish 1 percent of the cost of all construction materials on an annual basis. That came out to $22 million this year.

In agreements like these, “the local government oftentimes is receiving a bigger upfront payment and less money in later years,” said Michael Hicks, an economist at Ball State University in Indiana who has studied data centers.

“It won’t mean durable increases in wages, or better school facilities, or other things that would be the normal course of the tax system,” he added.

The data center in Richland Parish, called Hyperion, is expected to be Meta’s largest, and operational by 2030. When completed, it will cover more than four million square feet amid fields of soybean, corn and cotton. Meta says the project represents billions of dollars in investment and will create 500 jobs that will last even after construction ends.

Henry Thornton, the community manager for Meta in Louisiana, said in a statement that “educators in Richland Parish are doing incredible work, and we are proud that our project is supporting the teachers who are shaping the next generation.”

Sheldon Jones, the parish’s superintendent, said that the school board was excited to reward teachers for their service, and that “other industries might locate in Richland Parish due to rapid growth.”

Local business leaders say the data center is already attracting more businesses to the area.

“The tax dollars are awesome, and the transformational payments going to our teachers are awesome,” said Rob Cleveland, the president of the economic development agency for northeast Louisiana. “But we’re working on bringing more companies and more opportunities.”

So far, Hyperion’s development has brought a mixed bag of changes. Richland Parish’s long-shrinking population — it was around 20,000 before the project — is now rising, but so is rent. Traffic is much worse than it used to be, but restaurants are moving in. Rayville got its first Taco Bell last month.

In the current fiscal year, which still has three months remaining, sales tax revenue in the parish has exceeded $42 million, more than double from the full fiscal year before it, according to Mike Busada, a lawyer for the Northwest Louisiana Finance Authority, which worked on behalf of the parish to negotiate with Meta.

For a parish facing chronic disinvestment and an accelerating exodus of young people, Mr. Busada said, trying to entice Meta without tax abatements would have been “a big roll of the dice.”

In Richland Parish, the median teacher salary is around $41,000, according to Mr. Jones, the superintendent. And the maximum bonus, which has long been tied to sales tax revenue, has hovered around $10,000 in recent years.

Even with the bonus, total annual incomes for most educators there have been less than the yearly salaries of most teachers in the United States.

This month, more than 100 certified educators in the parish received checks for almost $51,000. Seniority has long been a factor in bonus payouts, so some teachers received less than that. Support staff, like cafeteria workers and bus drivers, received around $17,000.

Ms. Yates says she is spending some of her bonus on pencil boxes, art supplies and books about Clifford the Big Red Dog. She and her husband are also stocking up on diapers for their 1-year-old son and paying down some student debt.

The school where she works has a library but no librarian, she said, and the pay scale there has been largely stagnant. “It’s hard for some teachers to stay in this parish when the economy continues to go up, but our salary doesn’t,” she said.

Dr. Hicks, the economist, warned that in the end, the tax arrangement would probably be more beneficial to Meta than to the people of Richland Parish.

But Mr. Busada said that were it not for Louisiana’s new tax incentives, Meta might not have decided to build there at all. “The philosophy that we’ve had, going into this, is that you can’t lose something that you never had,” he said.

Now, as construction activity reaches its peak, Ms. Lollie is watching the cities and towns of northeast Louisiana change in front of her eyes. The regional airport in Monroe is bustling, she said, and the local restaurants in Rayville are filled with strangers. Hotel owners, landlords and retailers are happy.

And this summer, so are teachers.

“It has impacted the community in good ways,” she said. “The question is, how long is it sustainable?”

You may also like

Leave a Comment

AdSense Space

@2025 – All Right Reserved. Designed and Developed by  Kaniz Fatema