After surge in requests, Hillsboro halts new data center tax break applications

The City of Hillsboro, Oregon, has temporarily stopped accepting new applications for data center tax breaks, effective May 7, following a surge of 17 applications. Mayor Beach Pace stated this pause is to allow city officials ample time to review existing proposals before a statewide, one-year moratorium on new data center tax breaks takes effect on June 6. The decision also comes ahead of a crucial June 2 City Council work session dedicated to discussing data centers and their implications. Oregon lawmakers recently expanded tax exemptions for industrial developments, which by law, Hillsboro must approve if developers meet state requirements. However, the same legislation introduced the upcoming moratorium, reflecting a shift in policy. City staff are currently evaluating legal obligations in consultation with Business Oregon and the city attorney to inform the Council's next steps, including the exploration of outright refusal of application approvals. The move has been met with mixed reactions. Longtime critic Dirk Knudsen expressed concerns that data centers consume land that could otherwise support higher-paying jobs, advocating for data centers to pay taxes comparable to companies like Nike and Intel. Conversely, Mayor Pace defended the economic contributions of data centers, highlighting their role in funding city amenities and public safety improvements such as community centers, fire stations, and emergency vehicles.