Ohio economists believe taxpayer-subsidized data centers a bad idea

A recent survey by Scioto Analysis found that a majority of economists on its Ohio Economic Experts Panel believe taxpayer incentives for data centers are not an efficient use of public funds to stimulate job growth. The experts also largely disagreed that the economic benefits of new data centers in Ohio outweigh their environmental and energy market externality costs, particularly due to their high energy consumption and lean operational staffing after initial construction. Data centers' substantial energy demands have prompted a search for new power sources and led American Electric Power (AEP) to impose tariffs on new data center projects in Ohio. These tariffs, which include an 85% minimum energy demand charge over 12-year contract terms with exit penalties, are currently being challenged and are under consideration by the Ohio Supreme Court. Public opposition is also rising, with a petition circulating in Brown and Adams counties that seeks a constitutional amendment to prohibit the construction of new data centers with peak loads exceeding 25 megawatts across the state. Critics like Christian Imboden, an economics professor at Bowling Green State University, highlight environmental concerns such as altered water temperatures and disrupted fish stocks. Despite these concerns, most surveyed economists did not view a statewide ban as an efficient solution, with eight out of 14 agreeing that such a measure's costs would outweigh its benefits. Michael Jones, an economics professor at the University of Cincinnati, suggested that market forces should determine industry winners and losers, and data centers should internalize and pay the true costs of their deployment rather than being targeted by state-level bans.