Moreno calls on data center owner to reject $4.5M Ohio subsidy
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U.S. Sen. Bernie Moreno (R-Ohio) is blasting a new tax break for a Northeast Ohio data center expansion project and calling on the company behind it to reject it.
Why it matters: The deal has become a flashpoint in Ohio's growing debate over whether data centers deserve taxpayer incentives when they consume massive quantities of energy but create relatively few permanent jobs.
State of play: In a letter obtained exclusively by Axios, the Ohio Republican urged private equity giant Carlyle Group to return a $4.5 million state subsidy recently approved for Ark Data Centers to expand facilities in Akron and Independence.
Catch up quick: State officials approved the tax break this month to support a $136 million expansion.
- In return, Ark committed to create 10 full-time jobs and maintain operations locally for at least 13 years.
What they're saying: "That's not economic development; that's a sweetheart deal for Wall Street while everyday Ohioans are forced to foot the bill," Moreno wrote in the March 16 letter to the Ohio Tax Credit Authority and Carlyle Group.
- He called on Carlyle to sign onto President Trump's "Ratepayer Protection Pledge," aimed at preventing data centers from shifting soaring electricity costs onto consumers, and to voluntarily give up the subsidy.
- "Make no mistake: Carlyle doesn't need the cut, and I won't stand by while Ohio families' pocketbooks get sold out for a superficial press release," Moreno wrote.
The other side: "Carlyle has a long-standing commitment to Ohio, employing nearly 6,500 people across more than 30 portfolio companies and investing approximately $1.5 billion on behalf of Ohio teachers and public sector employees," a Carlyle spokesperson said in a statement to Axios.
- Supporters of the incentive say its value goes beyond the 10 new jobs.
- Team NEO's Matt Dolan told Cleveland.com that the subsidy not only secured Ark's Ohio investment for the expansion, but also prevented existing facilities from relocating to Indiana or Illinois, where Ark also owns data centers.
Between the lines: The tax break is a 50% sales tax exemption on data center equipment spread out over 10 years, not a cash subsidy.
- And Ark Data Centers in Ohio are not "hyperscale operators" like Meta or Google, an Ark spokesperson tells Axios, adding that calls to sign Trump's ratepayer protection pledge are therefore not applicable.
As Ohio's data center boom accelerates with the demands of AI, a group of rural Ohioans is hoping to amend the state constitution to ban data centers larger than 25 megawatts, Cleveland.com also reported.
- Residents submitted signatures to the Ohio Attorney General's Office Monday to start the ballot process.
- If approved, supporters would then need to gather roughly 413,000 valid signatures by July to place the amendment on the November ballot.
Editor's note: This story has been updated with comment from spokespeople from the Carlyle Group and Ark Data Centers.