Earlier this month, House Speaker David Osborne made an interesting comment to the Lexington Herald-Leader about whether Kentucky’s generous tax incentives to data centers were a good idea.

“We should always be asking whether an incentive delivers a return for taxpayers, but we also need to make sure we’re comparing apples to apples before drawing false conclusions disguised as economic analysis,” Osborne said. “Instead of looking at this in isolation, Kentucky has to evaluate these programs in the context of the broader economic development landscape.”

Despite the not very subtle dig at the Kentucky Center for Economic Policy, which found that the legislature’s data center incentives could cost the state billions of dollars, Osborne was on to something. 

Kentucky gives away more than $9 billion a year in tax incentives, breaks and rebates, otherwise known as tax expenditures. By 2028, it will be nearly $10 billion. Do they work in the “broader economic development landscape?” 

We don’t know because we don’t “evaluate” them.

But we love to hand them out. We give them to gigantic replicas of Noah’s Ark, we use them to evict mobile home park residents, we give them to millionaire horse owners, fancy shopping malls, ostrich farmers, Hallmark movie directors and much, much more.

You can read all about them in the Tax Expenditure Analysis, a handy report written every year by the Office of State Budget Director. 

Now there are some big ones, like a sales tax break on food and medications, that probably help people. But a lot of these are corporate welfare, plain and simple, and they are often awarded not on merit but on the size of their lobbyists’ delegation. (It helps if the lobbyists are former legislators.)

Once, someone did do something. Or tried. Louisville Republican Rep. Ken Fleming, chaired a task force that concluded Kentucky should keep the top 10 most expensive tax expenditures, like food and medicine, and get rid of the rest. 

Did his colleagues jump at this chance to save money? Not a bit, even though they are now trying to eliminate the state income tax. It would take some brave politicians to stand up to the herdsmen of all those sacred cows.

But maybe Rep. Osborne is ready. Given the statewide outrage over data centers, one of his colleagues hinted the General Assembly might be making some changes to the generous incentives offered to data center developers.

And the aforementioned Kentucky Center for Economic Policy has also pointed out that depending on how data centers are classified – “manufacturing” or “industrial processing” facilities – they could possibly qualify for more breaks in local property taxes or sales taxes on energy costs, which already exist.

Data centers have provoked some deep vein of bipartisan anxiety in Kentucky, ostensibly about pollution and high costs, but more viscerally centered around AI, children and social media, job loss, and fears of being controlled by feckless tech bros. Politicians from both parties, including Gov. Beshear, now say if data centers are so great, they should pay their own  way. 

But while we’re at it, why don’t we see how much good all those other tax giveaways are doing for our economy. It’s exciting that Osborne agrees, and maybe with his political heft, Kentucky could finally see if all these giveaways make any sense.