Last Tuesday, Oregon Governor Tina Kotek appeared at an anti-data center rally in Salem where she announced she now supports a moratorium on new data centers. As OPB reported, the announcement shows Kotek has abandoned the cautious approach she had previously taken on an issue that’s gaining momentum with voters and raising the stakes in her bid for reelection in less than two months.
Within hours of Kotek’s announcement, gubernatorial opponent state Sen. Christine Drazan told KATU that she too supports an immediate pause on data centers and that they should provide benefits for communities that host them, among other requirements for approval. That’s a shift from just a few weeks ago when Drazan told OPB that she doesn’t support ending existing tax breaks for the roughly 120 data centers in the state.
Think Out Loud features OPB political reporters Dirk VanderHart and Lauren Dake explaining all this in the latest episode of the OPB Politics Now podcast.
Note: The following transcript was transcribed digitally and validated for accuracy, readability and formatting by an OPB volunteer.
Dave Miller: This is Think Out Loud on OPB. I’m Dave Miller. For quite some time, Democratic Oregon Governor Tina Kotek and her Republican challenger, state Senator Christine Drazan, didn’t seem to have very strong or very clear stances on data centers. That changed last week. Within hours of each other, they both announced that they support temporary moratoriums on new data centers in the state, tapping into a bipartisan nationwide turn against these massive and energy intensive buildings. This was the subject of the latest episode of the OPB Politics Now podcast, featuring our political reporters, Dirk VanderHart and Lauren Dake. I’ll let Lauren take it from here.
Lauren Dake: Data centers seem to have snuck up on a lot of politicians this year. They’ve been around for decades, but we haven’t really heard from elected officials who have been able to take a really clear position on them. Now they have become this major issue in Oregon and elsewhere. Let’s talk about how Governor Kotek and Senator Drazan have navigated this. And let’s start with Kotek.
Dirk VanderHart: Sure. Kotek has professed to be concerned about data centers, I think for a while now, really, as these concerns have emerged that they are eating up huge amounts of power, using a ton of water, potentially raising energy bills on the rest of us, all that stuff. But Kotek has gone about her concern, I would say, in a very Kotek-ian way, which is to say, she created a task force. So, last year, she created this Data Center Task Force that she charged with studying the positives and the negatives of data centers, and to come back to her with some recommendations for how the state might shift its policies. We are still waiting for those recommendations. They won’t be out until the end of the year.
But, as you’re suggesting, Lauren, the issue hasn’t necessarily moved on Kotek’s timeline, and she’s actually had to change her stance in some cases. For instance, earlier this year, Kotek had this economic development bill that would have expanded property tax breaks that are not specific to data centers but are often used by data centers, and that generated calls for Kotek to write data centers out of the bill. She initially refused to do that. She said she wanted to wait for advice from her task force. But in the end, she wound up buckling to this legislative pressure and blocked data centers from receiving some of these tax breaks for a year or so.
Kotek also signed a bill last year, the POWER Act, that works to make data centers pay for the costs of the immense amounts of energy they use rather than passing it on to other ratepayers. That’s something we’ve been hearing a lot about lately. And lastly, she has seemed to hit on a line she loves in the last few months, which is the notion that Oregon needs to “Stop being a cheap date” for data centers, by which she seems to mean the state needs to demand more from data centers that are developed here. So she’s said a lot. We can debate whether she’s actually done a lot, but she’s said quite a bit.
Dake: And tell us about the Republican candidate Drazan’s stance. Where has she fallen on this issue?
VanderHart: So, in looking around, it feels like that’s been a little harder to pin down. She has said repeatedly, she thinks that if local communities want data centers and any of the new tax money or other benefits they might bring, they should be able to do that. They should be able to welcome them. But she really hadn’t articulated much of a plan or position until very, very recently. In fact, as you know, Drazan unveiled her detailed policy platform last month, which is something she called the “Drazan Plan,” and data centers weren’t even mentioned in it. I asked her at a press conference about that, and whether she supported the generous property tax breaks these centers often claim. Here’s part of what she said:
Senator Christine Drazen: My approach to data centers is not that, and you know, I don’t want to unwind existing incentives, but I want to have a very serious conversation about how we can make sure that no matter what sector that you are operating in, that your businesses can actually thrive, and right now we’re incentivizing data centers. We just are.
VanderHart: She basically said, I’m not proposing decreasing these tax incentives for data centers, but I want to make sure that other business sectors can thrive, too. And what we really need to do is reduce regulations. That’s something we hear from Drazan a lot. So, that was her answer at the time.
Dake: OK. So neither of them really seem to be moving toward declaring support for a moratorium on data centers. But there were signs that perhaps voters wanted them to.
VanderHart: Well, yeah, voters nationwide, I think, have signaled they are fairly apoplectic about data centers and the potential to increase power costs or suck up resources or whatever else. Oregon is no different. When DHM Research, the polling firm based in Lake Oswego, recently asked voters about data centers, I think the results were fairly strikingly negative. More than 70% of people had a negative impression of data centers, something like 66% favored a moratorium on new data centers, and almost 75% opposed the idea of offering tax breaks to these hugely rich companies that are building out data centers in this AI boom we are in. I believe those are very difficult numbers for any politician to ignore.
Dake: And that brings us to last week, when this really seemed to catch fire as an issue in this race.
VanderHart: Yeah, I mean, look, I think this has really been brewing for a few weeks. I think last week we did see a lot of activity, but it’s been building. As you know, Kotek recently used her authority to block the transfer of state-owned land for this data center project in Salem. We talked about that, I think, on the podcast in August. And ever since then, she’s been really messaging about that move. She sort of casts herself as a fighter for data centers in whatever limited role she can play as governor. Here is part of a video the governor’s office put out, I don’t know, three weeks ago, something like that:
Governor Tina Kotek: Here in Salem, when I learned the state was planning to sell public land for a proposed data center, I directed the state to end that agreement. Across the state, city and county leaders are listening to you. They’re voting to pause future development of data centers so they can better understand what Oregonians are getting in return. I support these local moratoriums.
VanderHart: So, pretty upbeat messaging, and Kotek making clear that she thinks localities, counties, cities can do whatever they want to block data centers, even though she’s not there yet or proposing that. But Drazan has been doing messaging of her own, and she’s been now attacking Kotek as what she would say as a friend to data centers. And interestingly to me, she casts Kotek as a person who favors data center tax breaks, which a recent attack ad poses or seems to frame as very, very negative. Here’s part of that:
Ad Speaker: Tina Kotek rolled out the red carpet for data centers, more than a billion dollars in tax breaks, ignoring the concerns of Oregon communities.
VanderHart: So remember, just a week before that ad began running, I think Drazan had told us she was not advocating rolling back tax incentives, didn’t seem to have all that big of an issue with them. And here’s the attack ad. So make of that what you will.
But anyway, I think today or very recently, Kotek unveiled her own new attack ad on data centers, which casts Drazan as the one who’s a friend to data centers. That’s based on the fact that Drazan voted against that POWER Act that I mentioned, which was that bill that lets regulators assign higher power rates to data centers. All of which is to say, it’s been really ramping up.
Dake: And then on Tuesday, both of them are out there declaring that they believe essentially the same thing, that there should be a moratorium on data centers.
VanderHart: Yeah, I mean, look, Kotek has been saying for months she wants to hear from her Data Center Task Force before making a call on specific policies. And you’re right, suddenly she’s out there, she’s on the Capitol steps appearing at this anti-data center rally, making clear that she has, at some point in the last week or two, decided that a moratorium is the right move. Here’s part of what she told the crowd at that rally:
Kotek: Everyone here today sees communities across Oregon being taken advantage of by data center corporations. I support a moratorium until we make sure that any data center development is done on our terms.
VanderHart: And basically, immediately after that, Drazan, who is also in Salem this week, is asked by a reporter at K2 what she thinks, how she feels about a moratorium, and it turns out she now supports a moratorium. Here is what she said in that interview:
Drazen: I think that Tina should issue a moratorium immediately, and we should have an immediate moratorium on data centers in the State of Oregon.
VanderHart: So, yeah, there we go. They both like a moratorium. I think we’ve been told for a while now, Drazan plans to add a data center plank to that Drazan Plan platform I mentioned. I haven’t checked recently whether it’s up, but she’s clearly solidifying her position there.
Dake: So what we’re left with here is that they both want to declare a moratorium. They are still trying to create some nuances between them, Drazan saying Kotek shouldn’t wait to declare a moratorium. Kotek believes that she currently doesn’t have the authority to declare a statewide moratorium and that she would need legislative authority. And then Kotek is blaming Drazan for not signing on to the POWER Act, as you mentioned. I mean, are there actually opposing views on data centers within these two candidates now?
VanderHart: Frankly, I could give you an answer right now, Lauren, on this, and it might change by the time we are done recording this podcast. That is how quickly this is moving. Like politicians around the country, they both seem to be sort of triangulating, trying to find the message that is going to put them in the best spot with voters. I don’t know that it necessarily feels tied to any deep conviction either of these people have. And you know, that’s not just in Oregon. Again, this is playing out nationally, but right now, I would agree, I think it’s hard to see much of a difference in their policy positions.
Dake: And as you’ve mentioned, this is playing out across the country. I think you mentioned to me earlier today, you felt like in some ways, Oregon was late to this debate, in part because we are actually a real hotspot for these data centers. There’s something like 125 data centers in Oregon.
VanderHart: Yeah, we are not the epicenter of data centers. We don’t have numbers that they have in places like Virginia or Texas or Ohio. But as we’ve discussed on this podcast, data centers have found reasons to come to Oregon for decades. Back before the hyperscalar stuff, before these huge, massive shopping mall-style data centers, when they were often a little smaller. Then, those reasons included things like plentiful hydropower and no sales tax, and maybe some climate advantages and those property tax breaks that we’ve talked about. All reasons why some companies like Google, Meta, Apple all have data centers here.
But with this AI boom and these massive hyperscale facilities that are catching everyone’s attention, the question is, will Oregon meaningfully curtail that interest? And as you said, it is something that political races and politicians and legislators in many, many states are taking up increasingly, just because the nation’s attention has been caught on this and people are very concerned.
Dake: And what do you think the actual policy upshot is at this point? I mean, should we expect major restrictions to emerge or is it just too soon to tell?
VanderHart: I think that is the thing about this right now, we’ve got a lot of talk going on right now. Data centers are this political hot potato in the governor’s race. But few things have actually changed on the state level. I mentioned that bill that blocks data centers from tax breaks offered by these enterprise zones programs for a year. That’s something Kotek signed earlier this year, so that changed. The governor on Tuesday also announced she was directing state agencies to pause requests to use state land for new data centers. So we don’t know what kind of impact that’s going to have, but she’s basically telling agencies, don’t do anything to help data center projects right now. We want to take a pause and see where we’re at. That is something she feels that she can do herself, but more meaningful policy changes will have to be taken up by the legislature.
I think you mentioned Kotek doesn’t believe she can enact a moratorium on her own. She’s now supporting the idea that lawmakers could do that. So, the legislature is meeting early next year, after this election. How has this issue changed by then? Are people still going to see a moratorium as the move? Will things have cooled down or maybe even intensified? And remember, what are these recommendations Kotek’s Data Center Task Force are going to come up with, that she has assured us if she’s still going to be the newly reelected governor, that she is going to put into a bill. All that is going to influence what path Oregon ultimately takes on this issue. And right now we have a lot of political posturing about how people want to frame it for voters.
Dake: Well, Dirk, God willing, we’ll be there this session and we’ll bring the information back to our lovely podcast listeners. Thanks so much for joining me on this episode.
VanderHart: It’s always my pleasure, Lauren. Thank you.
Miller: That was Lauren Dake and Dirk VanderHart, two members of our political reporting team, talking on the latest episode of the OPB Politics Now podcast. It was produced by our political editor, Andrew Theen.
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