Are tax breaks appropriate?
Ohio leadership has for quite some time been promising improvements in employment opportunities for Buckeye State residents. Lofty goals such as having a large employer within commuting distance of every Ohioan gave us reason to hope. What we got — in droves — are data centers, which don’t check many of the boxes when it comes to benefiting residents.
Policy Matters Ohio, a progressive watchdog organization, took a look at all those data centers and what they mean for the state. There are more questions than answers. According to a report by the Ohio Capital Journal, data centers could be costing the state a LOT of money, particularly when one compares the tax revenue given up with the number of jobs created.
“If the investments announced by Amazon, Google, and Microsoft in the past two years are all covered by the tax break (a sales-tax exemption created in 2013), the state and localities could lose out on almost $1.6 billion in sales-tax revenue, with only modest job-creation to show for it,” Policy Matters wrote, according to the Capital Journal.
Meanwhile lawmakers have already said there is no wiggle room to spare tax revenue.
Oddly, Gov. Mike DeWine’s office responded to questions about the return on investment for Ohio on data centers this way:
“AWS’s investments support thousands of new jobs in high-demand sectors like telecommunications, software development, facilities maintenance, and electricity generation within the cloud infrastructure supply chain.” But, the Capital Journal notes there is no documentation to support the claim.
Perhaps it’s time to rethink our priorities as state government works to help diversify and expand our economy. When they do, elected officials and policymakers must ask themselves two questions: Are we shooting ourselves in the foot with too many tax breaks for the wrong companies? And are we working to bring the possibility of good-paying jobs to ALL Ohioans?