Ohio's Data Center Bet Missed Its Own Estimate by $1.5 Billion. Now It Is Deciding a Senate Race.

In 2025, Ohio's Department of Taxation estimated that the state's sales and use tax exemption for data center equipment would cost about $136 million.

The actual figure came in at roughly $1.6 billion. Eleven times the estimate. Local governments absorbed another $166.8 million on top of it.

On May 27, Governor Mike DeWine directed the chair of the Ohio Tax Credit Authority to stop accepting new exemption requests while the legislature's Joint Data Center Committee studies the industry. That is an unusual step: a Republican governor pausing a business tax incentive in a state that has spent a decade competing for exactly this kind of investment.

It is worth stating the other side of the ledger plainly, because it is also real. Facilities that had already received exemptions reported $27.2 billion in capital investment in 2025. On August 17, OpenAI confirmed it is joining the PORTS Pike Technology Campus in Pike County, projecting roughly 35,000 construction jobs through 2032 and 2,500 long term operating positions. That is not a rounding error in a region that lost its uranium enrichment plant.

So this is not a simple story about a giveaway. It is a story about what happens when a state writes an incentive with no mechanism to reprice it, and the industry it was written for scales past anything the fiscal note imagined.

The political turn

On August 19, Axios published a memo from the National Republican Senatorial Committee, dated August 18 and titled "Ohio Data Center Risk." It was addressed to artificial intelligence companies. Its assessment of Senator Jon Husted's reelection: more than any other thing in the race, data centers are the anchor hanging around his neck. It warns that if Husted loses and data centers take the blame, elected officials nationally will not go near the next project. An NRSC spokesperson confirmed the memo's authenticity.

Read that as an operating document rather than a political attack, because that is what it is. A party's own campaign arm told an industry, in writing, that a single infrastructure issue may cost them a Senate seat, and asked that industry to help fix its brand.

The memo describes the race as a dead heat, citing private polling it has not released. The most recent public polling says something different: Fox News, in the field August 6 to 10 with 1,008 registered Ohio voters, jointly directed by Beacon Research and Shaw and Company, shows Sherrod Brown at 53 and Husted at 45, unchanged from June. A released public poll and an unreleased internal one are not equivalent evidence.

What the actual policy fight is

Underneath the campaign noise sits a technical question with real distributional stakes: cost allocation.

When a facility requires 100 megawatts or more, somebody pays for the new generation, transmission, and distribution built to serve it. If a utility spreads those costs across the rate base, every household underwrites infrastructure built for a single customer.

Husted introduced the Ratepayer Protection Act on July 20. It would push states and utility commissions to adopt standards requiring large load customers to carry their full incremental costs plus financial assurances. It is federal legislation directing states to act, not a self-executing mandate, and that distinction matters when it appears in a campaign ad.

In Ohio, that question runs through the Public Utilities Commission, whose commissioners the next governor appoints. Which is how a debate about server farms becomes a debate about the governor's race.

The part that does not resolve cleanly

At a standing room only hearing in Millersport this week, the heads of the electrical workers, operating engineers, plumbers, and carpenters unions made their position unmistakable: data centers mean good jobs. The local residents in the room pushed back, noting the union representatives had come in from Columbus and would not be living next to a new natural gas plant.

Both groups are telling the truth about their own lives. Construction employment is real and it ends. Operating headcount is small relative to the footprint. The electricity and water demand does not end.

That is the honest shape of this issue, and it is why it scrambles the usual coalitions. In Ohio right now, an environmental advocate, an election integrity activist, and an anti-vaccine lobbyist all showed up to the same hearing expecting the same fight.

For anyone tracking energy policy, economic development, or the 2026 map: this is the issue to watch. Not because one side is obviously right, but because it is the rare fight where the coalitions do not line up the way anyone drew them.

Full breakdown, with every figure sourced: https://podcasts.apple.com/us/podcast/ohio-senate-race-2026-leaked-gop-memo-calls-data-centers/id1626987640?i=1000785115708