Hillsboro’s Data Center Tax Deals: The Classroom Myth, the Bond Reality

The Real Story – A Column

Hillsboro’s Data Center Tax Deals: The Classroom Myth, the Bond Reality ~

As we head into the end of this most  tumultuous year,  two things are clear.  Clearly, the biggest stories of 2025 have been those highlighting the chilling and devastating effects of ICE on our residents, businesses, and entire community.   In second place is the undeniable truth that Hillsboro, as a community, has been entirely overtaken by the Data Center industry.  Hundreds of acres of our community have now been completely paved over with concrete and steel, changing our beautiful skylines to something almost unimaginable.   The onslaught has been remarkable and terrifying at the same time.   And things are not slowing down as the Herald is tracking land sales in the hundreds of acres that are happening as we speak- sites that will produce more and more massive cement buildings, one that could be 20 acres under one roof.

While many will defend these electricity-guzzling super-computer hotels as being “important to the economy,” the benefits are hard to see.  Our governments here, both State and Local, promote Data Centers for one reason: future property tax revenues.  There are no other defensible reasons.  Providing relatively few jobs after they open, these centers are in fact designed to promote AI, speeding up the destruction of millions of jobs and taking Billions in profits annually out of the State of Oregon while paying no taxes.  This has led anyone who has become informed about these matters to ask, “How stupid are we?”

In Oregon, we are pretty god-damned stupid.

In today’s story, we revisit the issue of schools and how Oregon’s Enterprise Zone Program (5-Year Property Tax Waiver) has allowed Data Centers to push hundreds of millions of dollars in school levies and bonds onto all of us.  We covered this in detail earlier this year, but a new report from The Dalles brought the issue to the forefront again.  Hillsboro residents and schools are the BIGGEST LOSERS statewide, so this is worth understanding.

Data Centers Boom, Intel Falls, And Oregon Schools Go Bust: $1.2 Billion In Tax Giveaways and Counting

A column out of The Dalles (OR) this week did something public institutions rarely do anymore: it hit “pause,” corrected the record, and admitted that Oregon’s tax-and-school funding story is more complicated than the slogans.  Robin Denning of the Columbia Community Connection wrote a story correcting, or rather clarifying and expanding on, some statements she had made.

Clarifications on the Recent Column about Google Taxes with Commissioner Hege and Mayor Mays

That correction matters in Hillsboro — because for years, Oregonians have been sold a simplified storyline: big projects come in, the tax base grows, schools win, everyone wins.  Denning documented that as property tax revenues to schools rise, the State of Oregon’s contributions to local schools will fall.

If you want to understand the data center economy, stop arguing about vibes and start following the math.

Oregon’s system is designed to confuse people — and it works.

Myth: “More local taxes mean more money for local classrooms.”

Oregon’s K–12 operating dollars are largely equalized across the state. That means more local operating revenue does not automatically translate into more operating spending in your district. In many cases, the state share falls.

That doesn’t mean communities aren’t impacted. It means the impact shows up somewhere else — and often, it shows up harder.

Reality: Bonds are local — and abatements can raise the price for everyone else

School bonds are different. Capital projects — roofs, HVAC, security upgrades, new buildings — are funded locally through property tax levies tied to debt payments.

Here’s the brutal simplicity: when large industrial values are abated, capped, or delayed, the taxable base is smaller than it otherwise would be. The bond payment doesn’t disappear. The rate required to raise that money rises — and it rises on the people who can’t negotiate special deals.

This is why residents don’t just feel “policy.” They feel it at the kitchen table.  Data Centers, untaxed, push the financial obligations for school bonds squarely onto residents and property owners.

MASSIVE 617 Million Dollar School Bond In The Works-  Based on recent meetings at the Hillsboro School Board, a survey is being conducted to prepare for an enormous school bond.  One that could add upwards of $2 per $1,000 in value to our property tax bills.  A family that owns a home valued at $600,000 would pay an additional $1,200 per year for this school bond if it passes.   

QTS Data Centers on NE Huffman have a Real market Value pusing $500,000,000 – and pay little to no property taxes.   Their share of this school bond would be ovr $1 Million dollars per year which would reduce the burden to the rest of us.  Use that same example over 30 other data centers in Hillsboro and it is easy to see that tens of Millions in tax giveaways will burden the rest of us.

The second system nobody talks about: Right-of-way revenue

Hillsboro also has a second pipeline of public revenue tied to utilities operating in the public right-of-way: franchise fees and a separate public utilities tax mechanism for providers operating without an authorized franchise.

That matters because it reveals something important:

Data centers don’t directly remit franchise fees to Hillsboro — utilities do.

That distinction matters because it shifts the real policy question from semantics to substance: does Hillsboro’s right-of-way revenue system (franchise fees and the City’s public utilities tax backstop) scale fairly with massive hyperscale electric loads — or can power procurement structures and classifications allow the largest users to outgrow the City’s revenue net while residents absorb rising costs elsewhere?

The “Free Ride” question Hillsboro must answer in public

If Hillsboro is going to host the infrastructure backbone of the AI economy — power-hungry campuses, industrial scale, constant expansion — then the public deserves a transparent answer to four questions:

1. Tax base: How much assessed value is created, and how much is fully taxable vs. abated/capped right now?

2. Bonds: What is the measurable impact on school bond affordability and rate burden?

3. Utilities: Who pays for substation, feeder, and grid upgrade costs — and how are those costs assigned?

4. Revenue capture: Are franchise/ROW-related revenues scaling with the industrial load explosion — or staying flat while impacts rise?

My ask to officials: show the ledger

This isn’t partisan. It’s accounting.

If local leaders want public trust, here’s the fastest way to earn it: publish a plain-English ledger that shows what Hillsboro gives, what Hillsboro gets, and who carries the long-term risk.

Call to action:

If you have documents, rate sheets, agreements, public records, internal emails, or utility billing structure details, contact the Hillsboro Herald.

The fastest way to end a “free ride” is to expose the numbers that make it possible.

Read more:

The Hillsboro Oregon Data Center Free Ride — and How to Stop It

Biggest Losers 

In 2024, five school districts lost more than $10 million in a single year. Six school districts had annual losses of more than $1,000 per student. Source- Good Jobs First.

Table 1: Largest Tax Abatement Losses by School District, 2024

Additional Reading:

Data Centers Boom, Intel Falls, And Oregon Schools Go Bust: $1.2 Billion In Tax Giveaways and Counting