A small town east of the Cascades declared an emergency over data centers this week, at a time when many Oregonians are increasingly concerned about their rapid growth.

The declaration wasn’t meant to crack down on data centers, but to urge the state to stop impeding them.

In response to Gov. Tina Kotek’s pause on data center permits through July, the Umatilla City Council voted on Tuesday to declare an emergency “due to the threat of widespread financial loss” over new data center developments.

Local governments across Oregon appear sharply divided on what amounts to a statewide data center moratorium. In Eastern and Central Oregon, where many of the state’s largest data centers have been built, local officials say they feel blindsided and are worried about lost revenue. But in Hillsboro, Oregon’s major tech hub, city officials have embraced the push to slow and regulate these developments.

This comes during rising national and local backlash against data centers, which are hubs of much of the internet — hosting websites, streaming platforms, business operations and artificial intelligence.

“Governor Kotek directed DEQ to pause certain air and water permits within the agency’s administrative authority because Oregonians have made it clear they expect thoughtful, responsible decisions about data center development,” Kotek’s office said in a statement.

A recent poll commissioned by OPB showed that nearly two-thirds of likely Oregon voters favored a temporary ban on data centers, and both major gubernatorial candidates have come out in favor of a moratorium. An earlier survey by a Kotek-appointed data center committee also found widespread opposition to new data centers. The Oregon Legislature is expected to address data center regulations after it convenes in January. Until then, local debates are setting the stage for the political battles to come.

Eastern Oregon pushes back

More than a dozen massive data center campuses have cropped up along the Columbia River in the Lower Umatilla Basin in recent years. Most belong to Amazon, which has multi-building hyperscale data center complexes in Boardman, Umatilla and Hermiston, and outside city limits in Morrow and Umatilla counties.

On Tuesday, the Umatilla City Council decried Kotek’s directive telling environmental regulators to temporarily stop issuing environmental permits to data centers.

Councilors argued that Kotek’s move could force the city to forgo millions of dollars in tax revenue from data center companies. They hope to use an emergency declaration as a springboard to get Kotek to reverse her decision, rally other data center communities to their cause or even take further legal action.

“(The) City should not be required to wait until investments are abandoned, jobs are lost, or essential services are compromised before taking action,” Umatilla City Manager Dave Stockdale wrote in a report to the City Council.

As with many public meetings in Eastern Oregon, Tuesday’s Umatilla City Council meeting was sparsely attended. Two people testified to voice concerns over data centers, while a third resident supported the council’s emergency declaration.

Umatilla resident Mary Cahill wondered whether her town had become too reliant on funding from the data center industry.

“I understand if we’re not growing, we’re dying, and maybe I should crawl back under the rock I came out of,” she told the City Council. “But I’m concerned (over) how much money we’ve been spending.”

City staff, however, painted a picture of data centers as a source of revenue — not expense — for the community.

Rural leaders say Kotek’s moratorium has cut into their budgets

Small governments in rural areas typically give data center operators 15-year tax breaks under Oregon’s Enterprise Zone program. But while companies forgo property taxes, they still pay other fees that have helped small towns fund new city buildings, services and infrastructure.

Kotek’s moratorium has paused data center construction, so cities and counties aren’t getting those fee payments.

Umatilla is set to lose out on more than $2.5 million in annual tax payments, $12 million in water infrastructure improvements and contributions to the bond that’s funding the construction of a new police station, staff there calculated.

Hermiston officials are also grappling with the financial costs of a pause in data center development.

“Total devastation,” is how Hermiston City Manager Mark Morgan described the impact on that neighboring rural city, where Amazon operates two hyperscale data center campuses.

“This move has cost Hermiston residents approximately $550 million in lost future anticipated local fee revenue,” Morgan said by email.

After the news of the moratorium, Amazon canceled plans for multiple new data center developments it had planned in Hermiston, Morgan said.

Morrow County Commissioner Gus Peterson called Kotek’s data center moratorium “executive overreach.”

“I’m not a fan of executive decisions that really ought to be legislative ones,” he said.

In Central Oregon, the city of Prineville has also become home to a handful of hyperscale data centers.

Apple and Meta, the parent company of Facebook, each operate hyperscale campuses in Prineville. Mayor Steve Uffelman said those companies pay fees that “far exceed what we would collect in property taxes.”

“It has been a godsend for our community that was trying to recreate itself from a timber town,” Uffelman said. “Now we are a viable, active, productive community.”

He said he was blindsided by Kotek’s decision, and that her office hadn’t reached out to Prineville city officials.

“I was very unhappy at the shallowness of the thought going into the decision by the governor,” Uffelman said. “Because the data centers, contrary to the public sentiment, have been amazingly beneficial to communities such as the city of Prineville.”

Hillsboro moves in step with Kotek’s moratorium

In Hillsboro, where data centers have smaller footprints and the regional economy is more robust, officials were already looking to restrict new developments.

Most of its centers are smaller “colocation” facilities: buildings owned by companies that rent server space to other companies.

The city implemented a 120-day moratorium on data centers and battery storage facilities in July. On Tuesday, city councilors unanimously approved permanent data center regulations.

The new rules would cap data center development at just over 600 acres citywide. Since data centers currently take up about 570 acres, that leaves just 30 acres for new data center development.

Councilors are also considering new design standards for data centers, including building height, noise limits and water limits.

But Hillsboro has a vastly different economy than Oregon’s other data center hubs. As a Portland suburb, it enjoys the benefits of neighboring Oregon’s largest city. It also already has a thriving tech market through computer and electronics manufacturing, namely semiconductors.

Hillsboro Councilor Rob Harris has argued that the city’s industrial land supply is finite and should be reserved for businesses that bring in more revenue and jobs.

“Every acre a data center consumes is an acre unavailable to a manufacturer that could bring thousands of permanent, high-quality jobs,” he wrote in an opinion published in The Oregonian/OregonLive.

What comes next?

When Kotek requested the permitting moratorium this month, data center operators had multiple major projects moving through the permitting pipeline.

They included Amazon’s planned “exascale” data center on a 1,300-acre lot in Boardman, as well as Sabey Data Centers’ plans for a data center building on a 60-acre lot in Umatilla.

In a statement, an Amazon spokesperson said Oregon’s permitting pause “has broad implications for Oregon’s economy.”

“This directive was issued abruptly, without meaningful stakeholder engagement of the workers, businesses, and municipalities it will affect,” the spokesperson said.

With new pollution permits now on hold through July, that push to start lock-in data centers before Oregon’s 2027 legislative session may have been thwarted. Lawmakers will return to Salem with their own proposals for the sector in January.

News Source : https://www.opb.org/article/2026/10/22/oregon-counties-cities-data-centers-could-cost-millions/