U.S. Senator Bernie Moreno, a Republican from Ohio, issued a strong warning Thursday regarding taxpayer subsidies for AI data centers, proposing federal action to end them. Moreno stated that companies should stop accepting subsidies, states should cease offering them, or the federal government would tax these incentives "down to nothing." This declaration comes amidst a growing public backlash against data centers, which have become a significant political issue in Ohio and beyond.
Moreno's proposal involves introducing federal legislation that would impose a 100% tax on any incentive a state or local government provides to a data center. He emphasized his desire for "no taxes" and "not a single taxpayer dollar going to support a data center. Period." Speaking at a Republican-dominated energy-affordability summit in Columbus, Moreno criticized the way data centers have been presented to Americans, noting that officials and tech companies have failed to explain their strategic importance for competing with China or their benefits in research. Instead, he said, the public has been left with the impression that these centers "are going to come into our community and take our water and pollute our environment," raise electricity prices, and eventually lead to job losses, all while being supported by taxpayer dollars. He called it "the worst sales pitch in the history of sales pitches." Moreno also stated he encouraged companies to take no more subsidies and that the states should stop, warning that federal action might be necessary to make that happen.
The issue of data center subsidies has placed Moreno's Republican colleague, U.S. Sen. Jon Husted, in a difficult position. Husted, who was appointed to the U.S. Senate in early 2025 following JD Vance's departure, is currently campaigning to retain his seat in a tight midterm election against former Democratic Sen. Sherrod Brown. Brown and other Democrats are reportedly using voter anger over data centers against Republicans who previously supported the incentives, with these attacks appearing to particularly hurt Husted. The National Republican Senatorial Committee (NRSC) acknowledged the severity of the issue in an Aug. 18 memo, stating that data centers are "the anchor hanging around Husted’s neck" and that if he loses due to this issue, it would be "catastrophic for data center construction" nationwide.
During the Columbus energy summit, Husted gave a five-minute opening talk where he only mentioned data centers once. He promoted a ratepayer-protection plan aimed at ensuring data centers "have their own energy supply." Husted then left the event without taking questions from reporters. When asked if Husted agreed with Moreno's proposal to federally tax state and local incentives, Husted's office did not respond.
Ohio has a history of strong support for data center construction, with both Republican former Governor John Kasich and current Governor Mike DeWine enthusiastically embracing tax breaks for wealthy companies like Google, Meta, and Amazon. Kasich quietly granted 40-year tax breaks for these projects, despite data centers producing relatively few jobs once built. DeWine continued to support these incentives, even though the companies were "clearly desperate to build as much computing capacity as they could." However, DeWine paused new incentives in May after Signal Ohio reported that the projected costs for 2025 in the state were $1.4 billion higher than taxpayers had been initially informed.
Public opinion has "swung hard against data centers," largely driven by concerns over their substantial electricity consumption. Americans object to potential increases in utility rates when data centers draw heavily from the existing power grid. Additionally, they are concerned about noise and pollution generated when these centers produce their own "behind the meter" power. Moreno acknowledged the previous agreements, noting that Ohio has already provided $2.3 billion to data center projects controlled by some of the world's wealthiest individuals. He stated there was "no way to get that back" and that former Governor Kasich was the one who ultimately negotiated those deals. Moreno emphasized the frustration of taxpayers who struggle with their bills while multi-billion-dollar companies receive public funds. He reiterated that companies or states must stop the practice, or the federal government is prepared to take action.
