Editors’ note: Late Wednesday afternoon, Gov. Mike DeWine abruptly announced a “pause” in Ohio’s sales tax exemption for data centers. You can read about that here. The announcement came after the quotes below (including some from DeWine himself).
There are 204 data centers in Ohio, according to an industry consultancy.
So in that sense, a legislative committee that began its work Wednesday to study the issue is better-late-than-never, at best.
Following a full hour of testimony from a lobbyist with the Data Center Coalition, a long train of officials from the state government and the regional electric grid testified to a bipartisan panel of lawmakers about a quickly emerging, hot-button political issue.
Republicans on the committee repeatedly voiced concerns about what they characterized as constituents’ unduly negative misunderstandings about data centers. Democrats took issue with the tax breaks, price pressure on electric markets and secrecy around the projects.
Testimony from the industry, local governments and opponents will come in future hearings. Lawmakers have drawn up an ambitious timeline, suggesting the committee will offer legislation of some type by early June.
Two political issues especially hovered over the hours of testimony Wednesday: electric rates and tax breaks.
Economists and industry analysts have pinned some of the blame for rapidly rising electric prices on data centers. This is based on the massive demand they add to the electricity markets and the ensuing investments into the electric grid needed to facilitate those operations.
Industry lobbyist Dan Diorio told lawmakers that facilities actually lower electric costs, not the other way around.
Maureen Willis, the state’s main residential ratepayer advocate at the Ohio Consumers’ Counsel, said lawmakers must ensure that where investments are needed primarily to serve extraordinary new loads from data centers, those developers should bear that extraordinary cost.
And then there are the subsidies. Signal Statewide broke news last week that Ohio’s data center sales tax exemption cost Ohio nearly $1.6 billion in lost revenue last year, 11 times higher than tax officials estimated.
Ohio lawmakers last year, via the state budget, voted to kill off data centers’ sales tax exemption. Gov. Mike DeWine vetoed the measure. House Republican Speaker Matt Huffman has said he would like to override the veto, but he hasn’t done so yet.
Parsing the words of committee members, Republicans on the panel signaled warmth to the industry. Sen. Bill Reineke, the likely next GOP senate president, at one point said data centers are a “constituent issue” requiring the industry to do a better job explaining itself, not a legislative one. Sen. Brian Chavez, a Washington County Republican, said electric prices are increasing because coal, oil and gas plants have gone offline in recent years, not just because data centers came online.
Democrats, in contrast, asked more probing questions about the necessity of the industry’s tax break, its water use, and the role of non-disclosure agreements signed by local officials as the facilities are developed.
It remains to be seen whether the study committee will be a political outlet valve to vent pressure on a constituent-provoking issue without changing much or an effort to lay the groundwork before a more tectonic shift.
That said, lawmakers are putting some time into this. Wednesday’s hearing ran for nearly four hours.
And what does the governor think?
Speaking of DeWine, our story last week on the $1.6 billion sales tax exemption drew some bristling responses from lawmakers who said they were kept in the dark about the real size of the credit.
Andrew asked the governor on Tuesday whether his administration has been transparent enough about the issue. He said they have.
“I don’t think there’s anything not transparent about what we have done,” DeWine said.
“Look, this is something that we are reviewing right now, and you know, I’ll have more, more to say about it in the future. But yes, it’s something that you know the legislature has got a working group now to take a look at, I think that’s a wise thing. This is what the legislature should be doing, getting evidence, hearing people out about this.”
No standing on the bus for Yost
A split decision from Republicans on the Ohio Supreme Court on Wednesday killed a lawsuit from Ohio Attorney General Dave Yost seeking to force Columbus City Schools to bus students in its district to private and charter schools.
The district in 2024 deemed busing the local students not enrolled in its schools as impractical, which alleviates a legal requirement to ferry them to private and charter schools. That was based on a bus driver shortage and travel distance. This has affected more than 2,600 students.
The court didn’t rule on the merits, instead finding that Yost lacked legal standing to bring the case in the first place. Students and their families are the injured party, so they should be the ones to bring a lawsuit, the justices said.
Solar loses at Ohio Supreme Court
Also from the court: A 6,000-acre proposed solar project in Madison County met the renewable energy buzzsaw of Ohio’s state government this week.
As Jake reports, the Ohio Supreme Court nixed a permit the Ohio Power Siting Board previously granted to Oak Run Solar. The ruling isn’t fatal, but it requires the developers to submit renderings of the project’s substations, as seen from public points of view. The court also directed OPSB to “more thoroughly” consider Oak Run’s impact on the local views.
The ruling comes after the OPSB has rejected seven industrial-scale solar projects, citing grassroots and local political opposition.
Samantha Sawmiller, a spokesperson for the project, said she was “pleased” with the decision.
“The OPSB’s permit approval was largely upheld with only one clarification required: examining the visual impact of the project substations,” she said. “Oak Run looks forward to working with OPSB to address this last open item so we can provide a significant opportunity for long‑term economic investment in Madison County while supporting Ohio’s growing energy needs.”
Notable quotables
Last week, we learned something we always suspected: People in high places are reading Signal Ohio.
First, as Andrew noticed, the much-ballyhooed Democratic autopsy of the 2024 election cycle cites his post-election thinker: “Why U.S. Sen. Sherrod Brown’s track record with working-class voters wasn’t enough.”
And last week, Jake’s story about the ballooning cost of a sales tax exemption for data centers piqued Ohio’s senior U.S. senator enough to compel him to wade into a touchy Statehouse issue.
“No more tax handouts for Big Tech!” Sen. Bernie Moreno wrote on X, sharing Jake’s story.
A Statehouse staple for steaks shutters
Mitchell’s Steakhouse, likely home to as much dealmaking as any committee room on 1 Capitol Square, has closed.
“After many wonderful years serving the downtown Columbus community, Mitchell’s Steakhouse on North Third Street has made the difficult decision to close its doors,” COO Shah Ghani said in a statement to the Columbus Dispatch.
In the news
Dr. Oz trusts Gov. DeWine: The top Trump administration official over Medicaid and Medicare vouched for DeWine’s leadership as the governor faces increased criticism from within his own party over how he has tackled Medicaid fraud, Andrew reported.
Pool noodles, ladders and memories: What Notre Dame College left behind, from Signal Statewide’s Amy Morona.
A Midwest renaissance? In the year that ended last June, census estimates reviewed by the Wall Street Journal show, the Midwest gained slightly more people from the rest of the country than it lost – about 16,000 – reversing perennial losses that topped 175,000 as recently as 2022.
Ohio’s public records laws weakened again. The Ohio Supreme Court dealt a blow to anyone seeking public documents from statewide officials, making it harder to fight when a government office denies a records request, the USA TODAY Network Ohio Bureau reports.
