Meta's Stanton Springs Data Center is seen Tuesday, Jan. 13, 2026, in Newton County, East of Atlanta. (AP Photo/Mike Stewart)

Ohio Senate Democrats have introduced a raft of legislation aimed at reining in data centers. The bills would eliminate tax breaks, require developers cover infrastructure costs and impose greater oversight for data center projects. Although Democrats are dwarfed by Republicans in the chamber, their proposals come at a moment of increasing skepticism for the rapidly growing industry.

“Data centers bring unique infrastructure, land use, and energy demands,” Senate Minority Leader Nickie Antonio explained.

“We want to make sure that no Ohio community feels compelled to accept a facility that raises their utility costs or strains local resources against the express will of the residents,” she added.

Throughout the country, people across the political spectrum have pushed back against data center projects in their neighborhoods. Many more have seen the industry’s impact in rising power and water bills. Despite studies touting the positive impact data centers can have on the local tax base and job market, resistance appears to be growing.

In 2025, the climate news outlet Heatmap News reported, companies shelved 25 data center projects around the country.

Closer to home, Microsoft decided to hold off on a $1 billion investment in three Central Ohio data centers last spring. A company called Sentinel halted another $1 billion project in West Jefferson last October after it couldn’t secure enough power. Late last month, hundreds of Mt. Orab residents crowded into a middle school gymnasium to express concerns about a 1,000 acre project they suspect may be a data center. Last week a city council member introduced a measure to halt any data center development for 180 days.

And late last year, Ohio regulators approved a data center specific service agreement proposed by AEP. That tariff requires companies cover build out costs, a percentage of their predicted demand (if actual use falls short), and imposes an exit fee if they close up shop before the contract ends. The Ohio Manufacturers Association is challenging the plan in the Ohio Supreme Court.

Still, all that resistance seems more speed bump than roadblock. Ohio still has the sixth most data centers in the country according to industry tracker Data Center Map, and 102 more announced or in progress. Response at the local level isn’t all pushback. City officials in Marysville, for instance, approved a 15-year tax abatement for a $1 billion data center project in December.

Dems’ plan

Democrats’ proposals include half a dozen bills as well as a resolution reaffirming Ohio’s constitutional home rule protections with regard to data center development. One bill would add language to that effect in statute — granting counties, townships and cities the authority to reject proposed projects.

State Sen. Bill DeMora, D-Columbus, pointed to a data center project in Hilliard, where Amazon is installing a natural gas power system with diesel backup generators over the objection of local officials.

“We have to let local people decide what’s best for their local communities, instead of the state cramming things down their throats,” DeMora said.

At the same time, state Sen. Casey Weinstein, D-Hudson, wants state regulators on the Public Utility Commission of Ohio to have a greater hand in the data center approval process, too. He said data centers should be subject to review ensuring their power demands won’t impact energy prices or reliability for the local community.

“We support economic growth and new technologies,” Weinstein said, “but that growth should not come at the expense of reliability or affordability for Ohioans.”

Another measure would eliminate Ohio’s sales tax exemption for data centers. That idea actually wound up in the state budget last summer, but Gov. Mike DeWine vetoed the provision. In his veto message, the governor defended the tax break as a discretionary incentive and an important tool as Ohio competes for investment with other states.

But State Sen. Kent Smith, D-Euclid, argued the costs outweigh the benefits. He cited a December report from the pro-tech industry group American Edge Project. Between existing data centers and planned projects, the group ranks Ohio seventh in the country when it comes to data center demand.

“But they also tabulated how much taxes would be raised from all the data centers in the various states,” Smith said. “Ohio is 22nd in taxes that will be delivered for the Ohio taxpayer.”

Smith has filed measures in the past to eliminate the sales tax exemption, and he said legislative researchers estimate its repeal would save Ohio $187 million a year.

Pay your own way

The remaining measures require data center developers to pay for their impact on local power and water systems.

Smith is proposing a wide-ranging measure that would force data centers to cover any costs for additional power generation or transmission.

“It would prohibit any cost from being paid by other rate payers,” Smith said. “This bill is intended to shield rate payers for bearing the increased infrastructure costs from billion-dollar corporations and their desire to put additional data centers in Ohio.”

State Sen. Willis Blackshear, D-Dayton, noted many data centers don’t track their water usage, and “communities should not remain in the dark about the true cost of having data centers in their backyard.” He’s working on one proposal that would institute regular reporting, cap consumption at 5 million gallons a day, and require data centers invest in local water infrastructure.

Blackshear also said data centers should be going even further — investing in programs to benefit local ratepayers. He suggested community power projects could deliver more capacity faster than a traditional power plant, and residential improvements like weatherization or heat pumps could improve efficiency and create more slack in the system.

“Bottom line,” he said, “if a community is hosting a data center, it deserves direct, long-lasting benefits in return. It’s only right.”

Follow Ohio Capital Journal Reporter Nick Evans on X or on Bluesky.

Original story can be found at https://ohiocapitaljournal.com