A legal fight over Hillsboro's data center tax breaks reached national audiences July 24 when the Courthouse News Service published a feature on a lawsuit filed last month by local farmers, educators, and advocacy groups challenging the city's enterprise zone approvals.

The suit was filed on June 22 in Washington County Circuit Court, and targets tax breaks granted to 17 data center projects.

Plaintiffs allege the city and Washington County stretched a five-year incentive program into multi-decade abatements extending as far as 2051, costing what one local analysis estimates at $117 million to $125 million per year in forgone property taxes for schools and public services.

That dollar figure comes from Hillsboro Herald editor Dirk Knudsen's analysis of public filings and has not been independently audited.

1000 Friends of Oregon organized the legal challenge alongside the Oregon Education Association, the state's largest teachers union. Attorneys Jesse Buss of Willamette Law Group, Eve Goldman of 1000 Friends of Oregon, and Eric Wriston of Crag Law Center represent the plaintiffs.

Local plaintiffs put a face on the fight

Among those listed in the suit: Aaron Nichols, owner of Stoneboat Farm north of Hillsboro; school board member Dr. Tammy Carpenter; farmer Jacob Roloff of unincorporated Washington County; and Hillsboro Ward 2 City Councilor Kipperlyn Sinclair.

"I've farmed north of Hillsboro and east of North Plains for a dozen years now," Nichols said in a statement accompanying the filing. "In the last five years I've seen the pace of the loss change to an all out sprint to accommodate the 'needs' of data centers. Meanwhile, my two children are in one of the oldest schools in Oregon. The parents fundraise every year for everything, from school supplies to field trips, and while local businesses such as mine pitch in, not once has a data center or any associated business donated to the school."

Carpenter said she witnessed the impact of tax breaks on local public schools while serving on the school board. Roloff, who lives in unincorporated Washington County, said he has no electoral say over Hillsboro city representatives yet their enterprise zone decisions affect funding for schools his son will attend.

City and county leaders have not filed a formal response to the suit but have previously said they followed state law and lacked authority to deny qualifying applications, according to the Oregon Capital Chronicle.

Lawsuit joins a broader policy crackdown

The legal challenge is one front in a multi-pronged effort to rein in data center incentives. Eight entities filed the 17 enterprise zone applications before a state moratorium under House Bill 4084 took effect Saturday, June 6.

n July 21, the Hillsboro City Council unanimously approved a separate 180-day pause on new Strategic Investment Program agreements for stand-alone data centers, closing a loophole that Council President Rob Harris flagged after Tax Fairness Oregon's Jody Wiser brought it to the council's attention.

The SIP pause does not affect existing participants like Intel.

City staff are also drafting development code amendments that would cap standalone data center acreage in industrial zones. The Hillsboro Planning Commission is scheduled to hold a public hearing on those changes Wednesday, August 26, with a City Council first reading slated for Tuesday, September 15.

Hillsboro and Washington County host about 40% of Oregon's 123 data centers, according to state planning data. A case number for the lawsuit was not immediately available from Washington County Circuit Court records.

The next public opportunity to weigh in on data center policy is the Planning Commission hearing August 26.