The arrival of artificial intelligence has brought with it a necessity to rapidly expand data center capacity. This rush is on full display in New Albany.
Amazon, Google, Meta (Facebook), and other companies promised to spend over $15 billion on data center investments in the last year. But this growth has come with a hefty price tag for residents: Almost every single data center project received full property tax abatements, state sale and use tax exemptions and payroll tax credits.
The full cost of these massive tax breaks has been sparsely disclosed and hard to total.
Ten years ago, Amazon chose central Ohio for its data center complex. Other tech giants followed. They come to New Albany primarily for its existing infrastructure, cheap energy, and open and affordable land – the main factors that determine where a company puts a data center. But they knew they’d be able to extract generous public subsidies.
One of the most valuable subsidy programs targeting data centers on the state level is a 15-year sale and use tax exemption for purchases. The program will cost Ohioans $127 million in fiscal year 2025 alone. The program’s average cost per job is astonishing: $634,000.
Google’s 2018 deal is higher yet; it averages $1.4 million per job.
Property tax abatements are another massive subsidy. Those come via Community Reinvestment Areas that grant full abatements for 15 years. While Franklin County reports tax abatements per company, it doesn’t separate project type. And in neighboring Licking County, which includes a small part of New Albany, disclosure is poor – this is also where some of the largest projects, and thus largest subsidies, are located.
The high cost of data center subsidies has real consequences for local government. Thanks to Franklin County’s better-than-usual transparency, we know, for example, that an agency that supports people with developmental disabilities lost $31 million to all business and development subsidies (including data centers).
The projects in New Albany include:
- In 2023,Amazon Web Servicestouted its$7.8 billion investment to build several data centers. New Albany approved the projects with a 30-year property tax abatement: 100% for the first 15 years and 75% for the second 15 years and state tax exemptions and credits.
This is in addition to the 2014 deal, which gave Amazon at least $93 million in various subsidies.
- In 2022, Meta announced a $1.5 billion expansion. We were not able to confirm subsidies but like Google, Facebook has been notorious for hiding behind LLCs.
- QTS, a company that builds colocation data centers, meaning they rent space and provide services to other companies, announced it would spend $4.4 billion to build 12 data centers in New Albany. The company got a 15-year, 100% property tax abatement, a full exemption from sale and use tax, and payroll tax credits.
It is evident companies want to be in New Albany: the town has AWS, Google, Meta, QTS all in close proximity. This is a well-established tech cluster that no longer needs to offer subsidies to companies – if it ever did.
New Albany residents pay property, sales, and income taxes that support their community. Some of the largest companies in the world should be doing no less.
Kasia Tarczynska is a senior research analyst with Good Jobs First, a non-profit focused on corporate and government accountability in economic development. She lives in Washington, D.C. and can be reached at kasia@goodjobsfirst.org.
