Agreement on Data Centers Falters as Ohio Lawmakers Go on Recess

While the Ohio Legislature has made strides this week in key areas before summer recess, it was unable to come to an agreement on the hot-button issue of data centers.

Lawmakers have been debating the level of regulation and tax breaks for data centers, while a joint committee is also studying the effects of data centers. As News 5 Cleveland reported, one specific debate focuses on whether or not data centers should receive a 50% tax exemption.

These tax exemptions have been significantly in the news since Republican Gov. Mike DeWine on June 2 announced a pause on the exemptions, a move welcomed by committee members.

However, some don’t think it goes far enough.

That same day, state Rep. Tristan Rader, a Democrat, introduced his bill, which would permanently do away with tax exemptions for data centers.

A press release from Rader’s office claimed Ohio lost out on $1.6 billion for 2025 due to the tax exemption, a figure 11 times higher than predicted. The state Democrat framing the issue as being about affordability.

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“In a state where people have to constantly stretch their dollar further, do more with less, and even completely go without certain services, it is shameful that the state government would choose to give away over a billion dollars to big tech companies,” Rader said. “This is why I am introducing the repeal of the sales tax loophole in the House to make sure we are putting people first, not trillion-dollar tech companies.”

Although Rader called DeWine’s temporary suspension “a step in the right direction,” he added that “it is not nearly enough.”

“Governor DeWine never should have reinstated this exemption in the first place after it was eliminated in last year’s budget. Ohioans are tired of a tax system that shifts the burden onto working families while the wealthiest continue to receive special treatment. Our schools, roads, libraries, and public services depend on everyone paying their fair share, and this exemption should be permanently repealed,” he continued.

Summer recess means it could be some time before the issue is fully addressed. Ohio NPR’s Sarah Donaldson spoke to state Sen. Brian Chavez, a Republican, who said that the Senate will not be coming back.

During a summit on Tuesday in Cleveland, DeWine addressed concerns about data centers paying their own bills, quoted by Signal Ohio as saying local governments should “be aggressive” in trying to get a deal and should not “just take what they give you.”

Advocates have pointed to the economic opportunity of data centers, as well as how much they have to do with countless data interactions in our daily lives.

Those opposed to the expansion of data centers have been showing up in large numbers to offer testimony. One concern highlighted is the higher utility costs associated with the presence of data centers. There’s even a ballot initiative campaign calling for a ban.

Currently, Ohio is sixth in the nation on data centers, behind states like Virginia and Texas, though it could lose that status.

For that reason, DeWine warned against closing Ohio off to data centers. “But we can’t throw them completely out and say, ‘Oh no, we don’t—we want to close the walls of the state of Ohio and we don’t want any data centers to come in’ any more than we can do that to any other business,” DeWine said. “It’s just where the future is. This is now, and we have to be, we have to be part of it.”