- Oregon’s data center tax incentives have become a major political flashpoint across the state.
- A warning that lawmakers had only about one election cycle to act helped speed up grassroots organizing.
- More than $450 million in property-tax exemptions has sharpened scrutiny of data center expansion in Oregon.
Oregon’s growing data center sector has drawn a broad and increasingly organized backlash from residents, environmental groups, educators, farmers and elected officials.
The fight intensified after reports indicated that Oregon data centers received more than $450 million in property-tax exemptions during 2026, including roughly $85 million tied to facilities in the Hillsboro area.
The opposition has coalesced around a grassroots coalition led by 1000 Friends of Oregon, a nonprofit that says it has helped unseat a Hillsboro-area senator and pressured Governor Tina Kotek to change course on data center incentives.
A warning turns into political action
Sam Diaz, executive director of 1000 Friends of Oregon, said his concerns deepened after observing the local effects of data center facilities around Prineville.
In 2022, a rancher told him that water allocations had been reduced because large server buildings had arrived nearby.
A later warning from a Virginia land-use executive gave Diaz another reason to accelerate organizing before data centers became harder to regulate politically.
“They said, ‘Once this takes hold in your state, you really got to get ahead of it, and you probably have one election cycle before you really start seeing politicians do the bidding of data centers,’” Diaz recalled.
Tensions rose further when Senator Janeen Sollman proposed opening 1,700 acres of farmland to industrial use and doubling an existing tax break available to data centers.
Heavy public pushback led her to drop the plan to expand that tax break within days of the 2026 session beginning, though the broader opposition had already taken hold.
Sollman later lost her seat to Myrna Muñoz, although she attributed her primary defeat to a separate bill involving strike benefits rather than to data center policy.
Criticism grew again after Hillsboro was found to have approved incentives for 17 data centers shortly before a statewide moratorium took effect.
Tax incentives unite an unlikely coalition
The incentive decisions helped bring together groups that had previously been working on different issues, including education funding, environmental protection, farmland preservation and tax policy.
In June, 1000 Friends of Oregon and 11 other plaintiffs filed suit against Hillsboro and companies connected with the facilities, challenging whether the city had legal authority to approve the agreements.
“The first question is whether the city had the authority to do what it did. The second is whether those applications even meet the Enterprise Zone Act requirements,” Diaz said.
The coalition argues that lower property-tax collections can reduce public services, including education funding through Oregon’s State School Fund.
The Oregon Education Association, which represents about 41,000 teachers, joined the lawsuit over what it described as financial consequences for schools statewide.
The group is also carrying those concerns into its agenda for the 2027 legislative session, where members seek changes to subsidies, land-use rules and public spending on economic development.
The lawsuit also places major technology companies at the center of the dispute because their facilities are linked to the tax incentives being challenged.
Among the firms named in the action are CoreWeave, Adobe and NVIDIA, which are tied to the disputed Enterprise Zone tax arrangements.
None of those companies has issued an official statement about the lawsuit or the allegations related to their involvement.
