Lawsuit filed against Hillsboro, Washington County over data center tax breaks
Advocacy groups including 1000 Friends of Oregon and the Oregon Education Association, along with Hillsboro Councilor Kipperlyn Sinclair, have filed a lawsuit against Hillsboro and Washington County. The suit seeks to overturn enterprise zone tax exemption agreements for data centers tied to companies like NVIDIA and CoreWeave, arguing these breaks divert public funds from schools and services. These tax breaks were approved shortly before a statewide moratorium on new data center incentives took effect in Oregon.
A coalition of advocacy groups, including 1000 Friends of Oregon and the Oregon Education Association, has filed a lawsuit against the City of Hillsboro and Washington County, Oregon. The suit, also listing Hillsboro Councilor Kipperlyn Sinclair as a plaintiff, aims to reverse multiple enterprise zone tax exemption agreements for data center projects associated with companies such as NVIDIA, CoreWeave, Adobe, Dropbox, QTS, and Flexential.
The plaintiffs argue that these tax breaks, approved in the weeks leading up to a statewide moratorium on new data center enterprise zone incentives that began on June 6, improperly divert public funds that would otherwise benefit schools and local services. Sam Diaz of 1000 Friends of Oregon stated that these exemptions benefit wealthy tech corporations at the expense of Oregonians.
The lawsuit alleges that Hillsboro and Washington County exceeded their authority, failed to follow proper procedures, and approved applications without sufficient evidence that the projects would meet economic benefit requirements under Oregon law. It also claims some agreements extend beyond the legal lifespan of the enterprise zone program.
In response, Hillsboro officials assert that staff worked in compliance with all legal and procedural requirements set by the state and county. City spokesperson Cindy Dauer indicated that state law mandated the approval of qualifying applications before the moratorium, leaving officials with no discretion to reject them. The city believes questions regarding Oregon's Enterprise Zone statutes should be addressed by state lawmakers rather than through litigation against local governments. The legal challenge unfolds amidst increasing public scrutiny over data center expansion, particularly regarding water and electricity consumption, and their contributions to local employment.