The Buckeye State’s Business Boom: A Double-Edged Sword?

Ohio has reached the top spot in CNBC’s annual survey of states for business, a testament to its concerted efforts to revamp its economy and create a business-friendly environment. Governor Mike DeWine’s strategy has paid off, with Ohio boasting unparalleled access at unrivaled costs, making it an attractive destination for growth, capital, and innovation.

However, beneath the surface, Ohio’s economic success story is complicated by issues such as data center development, which brings in jobs and investment but also raises concerns about affordability and environmental sustainability. Grassroots opposition to large-scale data centers has already led to a temporary freeze on tax breaks for developers, highlighting the delicate balance between economic growth and social welfare.

Ohio’s infrastructure plays a key role in its success, particularly when it comes to access to markets. With over 143 million people living within a day’s drive, Ohio companies enjoy better connectivity than their counterparts in any other state. The state’s robust programs for pairing businesses with shovel-ready sites have also been instrumental in attracting major investments, such as the $1 billion manufacturing site chosen by defense technology company Anduril.

Data centers contribute to Ohio’s economic development but are often associated with significant energy consumption and rising utility costs for residents. This issue has become a contentious point in the upcoming gubernatorial election, with Democratic nominee Dr. Amy Acton calling for guardrails on data center development to protect residential rates and union jobs.

Ohio excels in terms of affordability, both in business costs and individual living expenses. With low rents, reasonable insurance and utility costs, and generous incentives for businesses, Ohio ranks No. 1 in the Cost of Doing Business category. However, this has also led to high property taxes, a major weakness in the gubernatorial campaign.

DeWine’s administration has taken steps to address the issue of property taxes, but it remains to be seen whether these efforts will satisfy voters and stakeholders alike. Ohio still lags behind in key categories such as Education and Workforce Development, highlighting the need for continued investment in areas beyond economic growth.

As Ohio continues its ascent to the top of the business rankings, it must confront the challenges inherent in its success. With data center development serving as a double-edged sword, policymakers will need to strike a balance between promoting economic growth and protecting social welfare. The outcome of this delicate balancing act will be crucial not just for the state’s economy but also for its residents, who are increasingly feeling the pinch of rising utility costs and environmental concerns.

Ohio’s business boom serves as a reminder that economic development is often a zero-sum game, where gains in one area can come at the expense of another. As the state continues to evolve and adapt to changing circumstances, it will be interesting to see how its policymakers respond to these challenges and whether they will ultimately manage to maintain their double-digit ranking in the years to come.

In the context of Ohio’s gubernatorial election, the focus on affordability has brought attention to an issue that is increasingly relevant across the United States. As voters weigh their options for the next governor, they would do well to consider not just the economic benefits but also the social and environmental implications of these policies. With great growth comes great responsibility, and it remains to be seen whether Ohio’s policymakers will rise to this challenge.