COLUMBUS, Ohio (WCMH) — Ohio is giving tech companies generous tax breaks, often amounting to millions more than the corporations are planning to invest toward Ohio workers.

Ohio’s “Silicon Heartland” has brought in billions of dollars in investments from major names in the tech industry, but a new report from Policy Matters Ohio, a nonprofit state policy research institute, calls the state’s investments back into these companies into question. The report alleges these generous tax breaks for large corporations will harm Ohioans, especially when compared to the number of jobs companies will create and the resources they will use.

“The Ohio General Assembly needs to rein in this huge giveaway,” Zach Schiller, report author and Policy Matters Ohio research director, said. “That’s urgent, since these data centers are also giant users of electricity, so they could drive up electric rates for Ohioans and threaten progress fighting climate change. Why do we want to provide massive subsidies to some of the wealthiest corporations when the result could be higher costs for Ohioans and Ohio businesses?”

According to Policy Matters Ohio, tax breaks for 13 companies investing in Ohio are estimated to total $281.88 million, nearly nine times the payroll these companies have pledged to Ohio workers. Policy Matters Ohio argues between state investments and tax breaks, incentives for corporations will cost the state nearly $1 million for each Ohio job created. See previous coverage of tax breaks for modest job creation in the video player above.

Specifically, the organization draws attention to the state’s data center tax exemption. Between Amazon, Google and Microsoft alone, Policy Matters Ohio estimates Ohio could lose out on almost $1.6 billion in sales tax revenue if all investments announced by those three companies in the last two years are covered in the exemption.

The exemption requires a company to invest at least $100 million in a three-year period and have an Ohio payroll of more than $1.5 million annually. Corporations that meet those requirements can be approved for a partial or total sales tax exemption on construction materials, computer equipment and other infrastructure needs. Policy Matters Ohio points out those are the only requirements for these companies, so once a project is approved, it has an open-ended invitation to use the tax exemption.

According to Ohio’s Department of Development, nine companies investing in Ohio are currently approved or serviced for the data center tax exemption. However, not all of the projects approved for data center tax exemptions are listed on the state’s website. Quality Technology Services was approved for a 100% sales tax exemption spanning 15 years in December 2023, according to documents from the Governor’s office. That company is not named online, although it is included in the Policy Matters Ohio report.

Policy Matters Ohio’s report focuses on the 13 approved tax exemption agreements underway as of September 2024, which included breaks for major corporations like Meta, Amazon and AEP. Together, these 13 companies have promised nearly $5.1 billion in investments, but only 356 jobs and $31.6 million in annual payroll. According to Policy Matters Ohio, estimates for lost local and state sales tax funds hit more than $343 million, or more than $960,000 lost in taxes for each job created.

Generally, data centers are not major employers. According to the U.S. Chamber of Commerce, a typical data center employs 1,688 local workers during construction. Once it’s operating, the Chamber estimates the average data center will employ 157 local employees. Ohio’s estimates are even fewer, with only 307 new jobs promised across the nine tax-exempt companies published by the Ohio Department of Development.

Policy Matters Ohio argues the tax incentives are not crucial to attracting data centers, pointing to comments made by Microsoft executive Bo Williams, who said, “I can’t think of a site selection or placement decision that was decided on a set of tax incentives.”

Instead, Meta said it considers site access, fiber and renewable energy resources, talent pool for staff and community partners when picking data center sites. Google said it chose central Ohio for data center construction because it employs the necessary combination of energy infrastructure, developable land, and available workforce.

To combat this, Policy Matters Ohio recommended several pathways for state legislators to maintain some tax incentives while increasing accountability. The nonprofit suggested limiting how much of the tax break can be cashed in each year depending on how many jobs are created, such as $50,000 per job. Other options offered include requiring 60-day notice before sales tax exemption decisions, regularly auditing electric use, legislature protecting Ohioans from increased electric rates and publicizing all exemption reports, including resource use.