Beaverton School Board member Tammy Carpenter is helping lead a lawsuit that seeks to reverse tax breaks granted to Hillsboro-area data centers.

Carpenter is one of about a dozen plaintiffs who filed suit June 22 in Washington County Circuit Court. The coalition, first reported by the Oregon Capital Chronicle, includes the Oregon Education Association, conservation group 1000 Friends of Oregon, Hillsboro City Councilor Kipperlyn Sinclair, Tax Fairness Oregon and three Hillsboro farmers.

The lawsuit challenges 17 Enterprise Zone applications that Hillsboro approved in March and April. In some cases, the approvals offered data center operators up to 25 years of back-to-back property tax waivers. The suit names Washington County, the City of Hillsboro and seven tech companies, including Adobe, Nvidia and Dropbox.

Those 17 approvals came after the Oregon Legislature passed a one-year pause on the Enterprise Zone program in March but before the moratorium took effect June 6.

Why it hits BSD

Carpenter argues the tax breaks have statewide consequences for schools. Property taxes fund the State School Fund, Oregon's main source of K-12 money. When data centers skip those taxes, every district gets less.

Beaverton School District, Oregon's second-largest, has felt the squeeze. The board voted to close McKay Elementary at the end of the last school year. The district cut 159 full-time equivalent positions and burned through $16.6 million in reserves to cover a $37 million budget gap, OPB reported in July.

Neighboring Hillsboro School District made $20 million in budget cuts for the 2025-26 school year, according to Street Roots.

When the lawsuit was filed in June, Carpenter said in a statement: "I want the government to invest in schools, not data centers. Schools are closing and students are struggling. On the school board, I saw the impact of giving tax breaks to corporations instead of investing that money in local public schools."

Sam Diaz, executive director of 1000 Friends of Oregon, told Street Roots the suit raises two questions: whether Hillsboro had the authority to approve the applications, and whether the applications actually met Enterprise Zone Act requirements.

In one case, the plaintiffs allege officials approved five new tax incentives for tech company NTT in a single application, with stacked five-year reprieves that would exempt parts of its expansion from property taxes until 2051.

Hillsboro spokesperson Patrick Preston told the Oregon Capital Chronicle in June that city staff could not legally reject applications that met state law before the moratorium took effect. The city has declined further comment, citing the pending litigation.

Hillsboro spokesperson Cindy Dauer told Street Roots the city had not performed cost-benefit analyses on the tax breaks before granting them but has since started commissioning studies.

What's ahead

The case is in its early stages. Diaz said the city is seeking to change which court hears the case.

The 2027 Oregon legislative session, beginning in January, looms as the next major battleground over data center policy. Gov. Tina Kotek called for a statewide moratorium on data centers in September.

Carpenter is also the Democratic nominee for Oregon House District 27, a seat that would give her a direct vote on any new data center legislation.