State House Republicans are preparing for a vote later this month to once again ax Ohio’s longstanding tax break for data centers after Gov. Mike DeWine preserved it last summer.
House Speaker Matt Huffman said Wednesday that he’s “whipping votes” – legislative lingo for formally tallying support and persuading any holdouts – to override DeWine’s veto of a law the legislature passed last June that would have ended the tax break.
“We’re going to see if we can get this done before the end of March,” Huffman said.
Overriding a veto requires support from at least 60 of the House’s 99 members. If that happens, 20 of 33 Ohio Senators would then have to vote in support to complete the veto override.
Republicans hold enough seats in both chambers to overturn DeWine’s veto without Democratic help, although it’s not clear that all members will fall in line. Data centers have supporters in both major parties because of their role in the economy and the construction jobs they create.
If the legislature manages to get the override done, it would give lawmakers a talking point for their campaigns in the May primary election. Data centers have emerged as a rising political issue as accelerating construction of the projects, prompted by the boom in artificial intelligence investment, has spurred local backlash. In communities around the state, residents have organized against proposed projects with concerns about loss of farmland, environmental impacts and data centers’ role in straining the electricity grid.
Critics have also questioned the benefit of giving tax breaks to data centers, since they create few permanent jobs. Illustrating that point, the Ohio Tax Credit Authority voted on Monday to give a $4.5 million sales tax break for a pair of data centers planned for Akron and the Cleveland suburb of Independence in exchange for a promise to create 10 permanent jobs. Data center tax breaks, which apply to the expensive computer equipment inside the facilities, added up to $127 million in total lost state revenue last year.
When issuing his veto last July, DeWine cited the facilities’ economic benefits, saying they had helped attract tech companies to invest in the state. Ohio now has the fifth-most data centers in the U.S., and Columbus is considered a top market nationally, although crowding and rising land prices have prompted developers to fan out across the state. Officials also say data centers are a necessary part of the United States’ modern tech economy and integral to its competition with China.
Dani Isaacsohn, the lead Democrat in the Ohio House, also defended data centers as an economic benefit on Wednesday. Asked whether he and other Democrats support overriding the veto, Isaacsohn avoided answering directly.
But, he said the data center boom in Ohio has resulted in dramatic increases in membership for the labor unions responsible for building and maintaining the facilities. Lawmakers’ focus should be on regulating artificial intelligence to make sure its benefits are spread broadly across society, he said.
“To the extent we are focused on those specific tax credits, if they are driving these jobs, then we should think very hard before we get rid of them,” Isaacsohn said.
Isaacsohn’s comments might suggest Democrats will be reluctant to help Republicans override the veto, although some Democrats have also criticized the tax break in the past.