Why It Matters
Ohio ratepayers are facing rising electricity costs tied in part to surging demand from data centers, while state and local governments have been offering significant tax incentives to attract the facilities. The question of who should bear those costs — and whether the jobs created justify the public expense — is now drawing scrutiny from academic economists across the state.
What Happened
A panel of Ohio economists was recently surveyed on two competing policy responses to the state’s rapid data center expansion: continuing tax incentives for the facilities, and imposing a constitutional ban on large new construction. The economists rejected both approaches.
Of 14 economists asked whether tax incentives for data centers represent an efficient use of public funds to stimulate job growth, ten disagreed, three were uncertain, and only one agreed. The same group was then asked whether a ballot initiative to ban large new centers would produce net economic benefits — seven said the costs of such a ban would outweigh the benefits, two disagreed, and five were uncertain.
The findings reflect a broader tension in Ohio’s energy and economic landscape. Utilities have announced massive grid investment programs to meet rising demand, costs that are typically passed on to ratepayers. Meanwhile, data centers operated by major technology firms have multiplied across the state, with more than 200 now in operation.
By the Numbers
$1 million — Estimated taxpayer cost per job created under some tax break arrangements for companies like Google and Meta, according to a January analysis by a Ohio policy research group.
$778 — Projected average cost for Ohio households to cool their homes between June and September this year.
$37 million — Reported 2025 compensation for AEP CEO Bill Fehrman, the Columbus-based utility’s chief executive, amounting to roughly $12,000 per hour.
$61 million — Amount federal prosecutors say Akron-based FirstEnergy paid in bribes to secure a $1.3 billion ratepayer-funded bailout, a scandal that came to light in 2020.
413,000 — Signatures a citizen group is seeking to place a constitutional ban on large new data centers on the November ballot.
What Economists Are Saying
Albert Sumell of Youngstown State University argued the subsidies represent a particularly poor use of public money. “They are associated with very few permanent jobs and high external costs,” he said, adding that once construction wraps up, data centers generate minimal ongoing employment while creating lasting environmental impacts.
Michael Jones of the University of Cincinnati took a market-oriented position against both the subsidies and the proposed ban. He argued that technology companies should absorb the full costs of their operations — including energy and land use impacts — rather than shifting them to taxpayers or ratepayers. “It should be up to the market to pick winners and losers,” he said.
David Brasington, also of the University of Cincinnati, offered a national security rationale for allowing continued data center development. He argued that artificial intelligence infrastructure is critical to competing with foreign adversaries, and that restricting it could leave the United States vulnerable. Ejindu Ume of Miami University was the lone economist to agree that data center subsidies are sound policy, though he did not elaborate on his reasoning.
Zoom Out
Ohio is not alone in wrestling with these trade-offs. States across the country have used aggressive tax incentives to attract data center investment, often justifying the deals on job creation grounds. Critics in multiple states have raised similar concerns — that the permanent job totals rarely match the scale of public subsidy involved. Ohio voters have grown increasingly focused on affordability pressures, including energy costs, which adds political salience to utility rate debates tied to data center load growth.
The FirstEnergy bribery scandal continues to cast a long shadow over Ohio utility regulation, with public trust in the state’s regulatory framework already strained before the current data center debate emerged.
What’s Next
The citizen-led effort to place a constitutional data center ban on the November ballot remains active, with organizers working to collect the required signatures. Gov. Mike DeWine and state legislators have not publicly indicated a legislative path forward on data center incentive reform. How Ohio balances ratepayer protection, economic development, and energy infrastructure investment is expected to remain a central issue heading into the fall election cycle.