A city in Oregon has declared a state of emergency over the potential impact of lost data center revenues, after the state’s governor introduced a de facto moratorium on new developments.

A Umatilla city official this week declared a Local State of Emergency in response to the “threat of widespread financial loss” stemming from Governor Tina Kotek's October directive to block new data center permits.

“Delays in anticipated revenues would necessarily delay the city's ability to implement these initiatives on their currently projected schedules,” Umatilla city manager Dave Stockdale said in a statement.

“More concerning, prolonged permitting uncertainty could result in the postponement, relocation, or cancellation of planned private investments, potentially delaying anticipated revenues and employment opportunities by two years or more, or eliminating some of those opportunities altogether.”

"This is about far more than data centers. It is about the families whose livelihoods depend on these jobs, the local businesses that rely on a strong and stable economy, and the residents who trust us to make responsible, long-term decisions for our community's future," he added.

The state of emergency was declared at a Umatilla city council meeting this week, where the council voted to approve a resolution to be reviewed in 90 days. The move follows Governor Kotek's recent directive to block new data center environmental permits being issued, introducing a de facto moratorium on new developments in Oregon.

Located in northwest Oregon, the city said it has four operating facilities, one additional facility under construction, and two additional facilities planned in the area. Sabey and Amazon Web Services are present in the area.

The resolution said the block on data centers in the area could delay (potentially permanently) more than $5 billion in anticipated private investment within the Umatilla area, cause delays of more than two years on projects going live, and threaten at least 1,000 construction employment opportunities as well as hundreds of permanent and related employment opportunities.

The request for a state of emergency was made by city manager Stockdale, who said in a letter to the Umatilla mayor and city council that the call was “not made lightly.”

“I believe the Governor's directive creates precisely the type of human-created circumstance involving threatened widespread financial loss that Oregon law expressly recognizes as a potential emergency,” he said. “For Umatilla, the consequences are not theoretical. The directive threatens significant private investment, employment opportunities, anticipated municipal revenues, and the city's ability to responsibly plan and finance essential public services and infrastructure.”

As well as some $6 million in direct financial losses, the resolution noted that a new police station set to be funded via data center-related funding could now be under threat, as well as millions of dollars in water infrastructure improvements.

“These consequences extend far beyond the interests of individual businesses. They threaten the broader economic and financial well-being of the Umatilla community," Stockdale said.

The resolution is set to lead to an economic impact assessment of the forecasted losses and see the council request an “immediate reconsideration” by Governor Kotek.

Governor Kotek ordered the state’s environmental regulators to temporarily stop issuing pollution permits to data centers earlier this month, effectively pausing data center development in the Beaver State until July 2027.

Kotek had already directed state agencies to pause land transactions for data center projects on government land. She issued the order last month, pausing any such deals until July 2027 in order to enable a statewide evaluation of long-term impacts associated with large-scale data center projects.

In August, Kotek blocked the land sale of 32 acres at the Mill Creek Corporate Center in southeast Salem for a proposed data center project by Verrus.

Some cities in Oregon have opted to put in place temporary moratoriums on data center projects, with Hillsboro putting a 120-day moratorium in place at the end of July 2026.

Despite the emergency declaration, the city is not at threat of immediate bankruptcy and the city's General Fund reserves “are at historically high levels.”

"To be unequivocally clear, the City of Umatilla has not spent, obligated, or appropriated any of the anticipated future revenues potentially affected by the Governor's directive," Stockdale said in a statement. "These revenues are incorporated into the city's financial planning and forecasts, and strategic planning, but no current City services, operations, or financial commitments rely upon these funds that have not yet been received."

"The concern is not an immediate budget shortfall, but rather the substantial disruption to carefully developed plans for near-future infrastructure investments, community improvements, and public services," he added. “The city's declaration of emergency is a proactive measure intended to protect Umatilla's current and long-term economic and financial stability, not a response to funds already spent or a current financial crisis."