Data Centers, Local Control, and What’s Next at the Statehouse
July 6, 2026
Ohio sits at the center of the nation’s data center boom. With over 200 facilities, the state ranks fifth in the nation, and demand is only accelerating as the artificial intelligence sector continues to expand. Companies such as Amazon, Google, Meta, and Microsoft have invested or committed billions of dollars across the state, bringing economic development opportunities, construction jobs, infrastructure investment, and new tax revenue to many communities.
While data centers offer significant opportunities, they also present challenges that differ from one community to another. Because those impacts are inherently local, decisions about whether and how data centers should be developed are best made by the local governments that understand their communities’ needs and priorities.
As the number of data center proposals has grown, so too has public scrutiny. Just a year ago, public opinion on data centers was relatively divided. Today, that has changed dramatically. Polls across the country now show overwhelming skepticism. A recent Embold Research survey found just 21% of Americans support data center construction near them, down from 43% a year ago, with 71% now opposed, including 55% strongly opposed. A Gallup poll found opposition to data centers now exceeds peak opposition to nuclear power plants. In Ohio, a Fox News survey found 65% of voters oppose data centers built to support AI. The backlash is strikingly bipartisan. As one national pollster put it, “Data centers don’t have a partisan friend.”
In Ohio, that sentiment has grown into a significant political force. Town halls across the state have drawn large and vocal crowds. A grassroots effort to amend the state constitution to prohibit large data centers collected tens of thousands of signatures, but organizers concluded they would fall short of the requirements to make the November ballot. The movement has not gone away, and its organizers have signaled they are only getting started.
How We Got Here
Ohio’s approach to data centers has shifted considerably over the years, and those changes have not always moved in a consistent direction. Changes to state energy law in 2025 made it easier for large energy users, including data centers, to develop their own power generation sources. While intended to attract investment and address growing electricity demand, those changes have also reduced opportunities for local review of certain energy projects. Recent concerns raised by local officials regarding emergency planning for a proposed data center power facility underscore the need for stronger coordination between project developers and the local governments and first responders responsible for protecting nearby residents. The Ohio Mayors Alliance highlighted this issue in its testimony to the Select Committee on Data Centers, emphasizing that local public safety agencies must be engaged early and meaningfully in planning for these facilities.
Around that same time, the General Assembly voted to eliminate the state’s data center sales tax exemption entirely, only to see the provision vetoed by Governor DeWine, who argued the incentive remained important to attracting investment. The legislature was in discussions regarding a potential override of the governor’s veto when Ohioans began to learn the true scale of what had been authorized.
The override proved unnecessary as it became clear the exemption was costing the state far more than previously understood, approximately $555 million in 2024 and nearly $1.6 billion in 2025, compared to earlier projections of roughly $136 million annually. As a result, Governor DeWine directed the Ohio Tax Credit Authority to pause new exemption applications while policymakers evaluated the state’s approach.
As the House and Senate Select Committee on Data Centers examined the issue further, attention turned to long-term tax exemption agreements negotiated during the Kasich administration with Amazon, Google, and Meta, including agreements which provided 100% sales tax exemptions for up to 40 years, worth billions of dollars and running into the 2050s. Fifteen other companies received significant breaks as well. The scale of these commitments, which were not well understood by many current lawmakers until recently, transformed data centers from a niche economic development topic into one of the most contested debates at the Statehouse.
A Bill That Stalled
In response to all the public discord, lawmakers drafted Sub. H.B. 646 in a matter of weeks. The bill aimed to address the most pressing concerns:
- requiring data centers to bear their own electric infrastructure costs
- capping local property tax abatements at 50%
- establishing new water use and wastewater reporting requirements
But the bill stalled over disagreements about the scope of changes to the sales tax exemption. It passed out of the Senate committee along party lines and was set for a floor vote; however, it was re-referred to committee when it became clear the House would not concur on Senate changes. The Senate has no plans to return until after the November election, meaning any state-level action is likely months away. Senator Brian Chavez, chair of the Senate Energy Committee and co-chair of the Select Committee on Data Centers, called it a missed opportunity for Ohio.
Transparency also emerged as a central concern during the committee’s work. Speaker Huffman said publicly that local officials should not be permitted to enter into nondisclosure agreements about data center projects. A separate bill, H.B. 695, would accomplish that goal.
Why Local Control Matters
The common thread connecting all these developments is the same:
Decisions about data centers are fundamentally local decisions, and the further they are removed from local oversight, the more difficult they become to manage well.
State policymakers are still working through fundamental questions about what deals were signed and at what cost, while cities are already managing the real-world consequences every day.
Cities have been doing this work all along. They are evaluating zoning requests, negotiating Payment in Lieu of Tax (PILOT) agreements that ensure communities receive revenue even when traditional property tax abatements are granted, investing in water infrastructure, updating emergency response plans, and balancing economic opportunity against community concerns. That work requires flexibility, because the right answer for one community may not be the right answer for another. The Urban Land Institute, in its Local Guidelines for Data Center Development, underscores that clear local rules benefit everyone, and no two jurisdictions are the same. Each needs the ability to layer in its own considerations.
The impacts of data centers are local. The people best positioned to weigh those impacts are the elected officials closest to the residents who experience them.
That is precisely why H.B. 392, known as the “Right to Compute Act,” warrants serious concern. Awaiting a House floor vote, the bill would broadly preempt local zoning and land-use authority over data centers and computational infrastructure. Cities would be required to meet a “compelling governmental interest of the highest order” standard to defend routine zoning conditions, a high bar that would expose communities to costly litigation and discourage proactive planning. At a time when the state is still grappling with foundational data center policy questions, preempting the local authority needed to protect citizens, natural resources, and infrastructure will only deepen the public frustration already driving opposition across Ohio.
The same foundational principle is before the Ohio Supreme Court in Columbus v. State, a home rule case arising from flavored tobacco regulation. The Ohio Mayors Alliance filed an amicus brief arguing the Court must preserve the Ohio Constitution’s guarantee of local self-governance. The Ohio Mayors Alliance noted, “Ohio mayors cannot effectively serve their communities if their local decisions are constantly overruled by state legislators who neither live nor work in their cities.”
Whether the subject is tobacco or terabytes, the principle holds that local governments must retain the authority to make decisions that reflect the unique circumstances and priorities of the communities they serve.
Resources for Local Governments
These resources provide helpful support for municipalities navigating data center development, planning, and community engagement.
Toolkits & Planning Guides
New Albany Data Center Toolkit: A comprehensive toolkit developed by the City of New Albany, featuring sample agreements, zoning information, and economic development templates.
Cuyahoga County Data Center Development Guide: A guide providing local communities with frameworks to evaluate proposals, understand impacts, and make informed decisions.
National League of Cities (NLC) Guides
Community Strategies to Address Data Center Development and Operation
Data Centers and Environmental Considerations
Local Government Resources
Urban Land Institute (ULI) Local Guidelines for Data Center Development: A practical resource focusing on planning, zoning, and municipal considerations.
Understanding Data Centers, Community & Economic Impacts Union County-Marysville: Supplemental information on managing data center development locally.
