Economists agree that data centers are not worth it for Ohioans

Ten of the 14 economists that Scioto Analysis recently surveyed said that providing tax incentives for data centers is not a good idea because Ohio would only spend taxpayers’ money without stimulating job growth in the Buckeye State.

Ohioans who oppose building data centers in their state recently began collecting signatures to ban them by placing a proposed constitutional amendment, certified by Ohio Attorney General Dave Yost, on the November ballot.

Supporters of the data centers, which already number more than 200 in Ohio, said they create new jobs and stimulate the economy. However, opponents said they raise energy prices for regular Ohioans and buy up their land.

Most economists who participated in the survey said they don’t think it is a good idea to provide tax incentives for data centers, while three economists said they are not sure, and one said it is a good idea.

“I can’t think of a worse use of public funds than to incentivize data centers. They are associated with very few permanent jobs and high external costs,” Albert Summell of Youngstown State University said, according to the Scioto Analysis report.

Those economists who were not that radically opposed to the data centers offered a more nuanced take, saying that whether providing tax incentives to the data centers is worth it depends on what economic activity occurs after construction begins.

Additionally, eight of 14 economists told Scioto Analysis that the economic benefits of building new data centers in Ohio are not worth it if the Buckeye State will suffer environmentally.

The Ohio Environmental Protection Agency previously considered a permit that would have allowed new data centers to discharge wastewater into Ohio’s lakes, which many Ohioans, as well as politicians like U.S. Sen. Bernie Moreno, R-Ohio, opposed.

It was also previously alleged that data centers could be connected to rare cancers and miscarriages.

Eight economists also said that building the data centers is not worth it because of the “energy-market externality costs associated with their construction,” according to the report.

“Data centers create very few jobs and destroy environmental conditions, for example, by changing water temperatures and disrupting fish stocks,” Charles Imboden of Bowling Green State University said.

Four economists told Scioto Analysis that they are not certain about the data centers, while two economists said they support building them, with the latter adding that the negative environmental consequences would be minor and that the potential tax revenue outweighs the drawbacks of having data centers in the state.

The report revealed that 7 of 14 economists said it would benefit Ohioans more economically if the state banned data centers entirely.

“It should be up to the market to pick winners and losers, and Ohio should not be targeting a particular industry. If there are concerns about energy use or land use, then data centers should internalize and pay the real costs of their deployment,” Michael Jones of the University of Cincinnati said.

Ohio lawmakers previously passed bills and created committees to hold accountable those seeking to build data centers in the state.