Tools · September 30, 2026

Who covers the gap when a data center’s value is waived

By Ryan Standley, Publisher / Authorized Officer, Record of Sale, LLC

An abatement takes assessed value off the tax roll. This page turns the waived value and the millage into a year of forgone tax, a multi-year total, and the extra burden on the base that is still taxed.

Drive past the fence and the building does not look like a taxpayer. It looks like a long shed with a hum, a security gate, and a sign that says the public should stay off the gravel. Inside, the assessed value can be enormous: land, a shell, and machines that cost more than the shell. Outside the fence, the county still runs a sheriff, a road, a school bus, and a fire truck that will come if the shed burns. An abatement is the deal that says some or all of that assessed value will not be taxed for a while. The gap is the tax that value would have paid. Somebody still wants the sheriff paid. The question on this page is who covers the gap.

Abated is a polite word for absent. The value may still be on a worksheet in the assessor’s office. It may even be announced at the groundbreaking, because a large number photographs well. If the abatement is real, that number is not on the roll the mills are multiplied against, or only a leftover piece of it is. Forgone tax is the multiplication that did not happen: abated assessed value, times the millage, divided by one thousand. That is one year of absence. Multiply by the years the deal runs and you have an undiscounted pile. This page does not pretend the pile is a present-value study. It does not pretend the millage stays frozen because an economist said so. It shows the hole, in dollars, at the millage you type.

The boxes begin with a campus Ryan Standley invented so the hole can be checked. Abated assessed value $800,000,000.00. Millage 15.25. Remaining taxable base, the roll that is still asked to pay, $3,400,000,000.00. Years of abatement: 15. One year of forgone tax is $12,200,000.00. Fifteen of those years, with no discount and no change in the rate, is $183,000,000.00. If that one-year hole were filled by raising the millage on the remaining base, the add-on would be about 3.5882 mills. On each $100,000 of that remaining base, the one-year shift is $358.82. Over the full 15 years, still undiscounted, that is $5,382.35 per $100,000 of today’s remaining base. Those are not your county’s figures. They are a fence you can see through. Type the abatement you actually have in front of you.

Two different people use the word “pays.” One person means the company, which pays a smaller tax bill than the full value would have produced, often in exchange for jobs, a payment in lieu of taxes, or a promise to build at all. The other person means the neighbor, the shop, and the house down the county road, whose millage may rise, or whose school may go without, if the budget does not shrink to fit the hole. This page is about the second person. It does not decide whether the deal was wise. It prices the absence so the hearing cannot be conducted entirely in jobs and renderings. Jobs can be real. Renderings can be handsome. The gap is still a number of dollars that the roll did not collect.

A waiver is a hole in the roll, not a gift certificate

An abatement, an exemption, a payment in lieu, a fee in lieu, an industrial revenue bond that holds title so the equipment is “not owned” by the company: the legal costumes differ, and the costumes matter when a lawyer is in the room. For a reader with a notice or a term sheet, the practical question is narrower. How much assessed value is not being taxed, for how long, at what millage? If you can answer those three, you can see the hole. If the term sheet only says “a competitive incentive” and never names the value or the years, you do not have an abatement yet. You have a mood. Ask for the value, the years, and whether land, building, and equipment are all inside the waiver or only the equipment. Equipment is often the expensive part of a data center, and it is often the part that depreciates, which means the hole can shrink on its own even if nobody repeals the deal. A shrinking hole is still a hole. Type the value that is waived this year if you want this year. Type a later year’s value if the schedule shows you one.

Data centers tempt people into a special kind of fog because the building is dull and the computers are not. The public hears “investment” measured in billions and pictures a factory with parking lots full at shift change. A data center can cost a fortune and employ a small crew. That is not a scandal by itself. A warehouse of servers is allowed to be a warehouse of servers. It becomes a tax question when the fortune is also the assessed value being waived, and the small crew is the benefit being offered in trade. You can think the trade is worth it. You can think it is not. You cannot think clearly if the waived value is left in the press release and never multiplied by the millage. Multiplication is the whole courtesy this page is trying to restore.

The remaining taxable base is everybody who did not get the waiver, added up. Houses, shops, farms, the data center’s own leftover taxable piece if the abatement is partial, the warehouse down the road that did not negotiate. If you leave that box blank, the page still shows the annual forgone tax and, if you typed years, the multi-year total. It will not show the shift. The shift is optional because some readers only want the size of the hole, and some readers want to see the hole spread across the roll that remains. Spreading is not a prediction that the board will raise the rate. It is the answer to a specific question: if the jurisdiction insisted on collecting the same dollars anyway, what would the remaining roll have to absorb? If the jurisdiction instead cuts the budget, nobody’s rate rises and the gap is paid in services. The page cannot tell you which choice the board will make. It can stop the room from treating the waiver as free.

One year of absence, then the years stacked

The annual figure is plain. Abated value divided by one thousand, times the mills. $800,000,000.00 divided by one thousand is 800,000. Times 15.25 mills is $12,200,000.00. You can also say: each mill on $800,000,000.00 is $800,000.00 a year, and there are 15.25 of those mills. Same product. I am showing the product twice because incentive memos sometimes quote the value and the millage on different pages and hope nobody multiplies. Multiply. $12,200,000.00 is the tax that does not arrive in year one of the example, at a frozen millage, on the waived value alone. It is not the company’s whole relationship with government. It does not subtract a payment in lieu. If the company pays a PILOT, subtract that payment from the annual figure in your notes, or type a net waived value if you can defend the net. A gross hole and a net hole are different facts. Label the one you computed.

The multi-year line multiplies that year by 15. $12,200,000.00 times 15 is $183,000,000.00. There is no discount rate. A dollar fifteen years from now is not, in an economist’s workbook, the same as a dollar tonight. This page refuses the workbook. Hearings already have too many workbooks that move the number by choosing a discount rate nobody voted on. The undiscounted total answers a civic question: if this year’s hole repeated for the life of the deal, how many nominal dollars of tax would not be collected? If the waived value declines because equipment depreciates, the repetition is too harsh, and you should run the years you have on the depreciation schedule instead of trusting the single total. If the millage rises, the repetition is too soft. The page will not invent either path. It will multiply the year you handed it.

Stacking without a discount also keeps the comparison honest with the neighbor’s budget. The neighbor does not pay property tax in present-value dollars. The neighbor pays a bill in the year it is due. Fifteen bills, each the size of the shift, are what a flat deal feels like if nothing else changes. Something else will change. Say that in the same breath as the total, so you are not accused of a magic number. Then keep the total anyway. A deal that cannot survive being stated as a stack of equal years is a deal that was relying on the stack never being stated. State it. Then bring in depreciation, a PILOT, and a jobs claim as amendments, not as replacements for the first sentence.

Who pays is a rate on the base that stayed

If the remaining base is $3,400,000,000.00 and the hole is $12,200,000.00, the mills required to fill that hole from the remaining base are the hole divided by the base, times one thousand. That is about 3.5882 mills. It is not added to the 15.25 mills you typed. Those 15.25 mills are the rate you assumed when you priced the waiver. The 3.5882 mills are a different sentence: the extra rate on everyone else that would replace the waived tax. A house with $100,000 of taxable value on that remaining roll would see about $358.82 a year from that extra rate. A house with $250,000 of taxable value would see about two and a half times that. Exemptions on that particular house still apply. The page is spreading the hole across a base, not printing a homestead bill.

This is the line that makes abatements feel personal, and it should feel personal without becoming a fairy tale. The school district does not send the neighbor an invoice labeled “data center.” It sets a rate, or it lives inside a state formula that may or may not hold the district harmless. Some states reimburse a school levy when a local board abates. Some states do not. Some reimbursement is partial, late, or capped. If your state holds the school harmless, the shift may land on the state budget, which is still somebody’s tax, just not the house next door. Type the millage that is actually exposed. If only the county’s mills are exposed and the school’s mills are reimbursed, do not type the combined rate and then tell the neighbor the whole shift is on their bill. You will have moved the gap to the wrong pocket. Wrong pockets start feuds. The feud can be earned. It should at least be aimed.

The other way the gap gets paid is by not replacing the dollars. The road project slips. The deputy position stays vacant. The library cuts hours. That outcome will not show up as a millage add-on, and this page will not draw it. If you want to talk about services, say so, and do not quote the shift mills as if they were adopted. Quote the annual forgone tax as money the adopted budget does not have, and then point at the line in the budget that was cut or never proposed. The budget-slice tool on this shelf is the other half of that conversation. The abatement page tells you the size of the absence. The slice tells you what the remaining dollar was budgeted to do. Together they are still not an audit. They are two ways to keep a groundbreaking from being the only exhibit.

What a data-center deal often hides in the exhibit

Read the exhibit for what is waived and what is not. Land is sometimes fully taxed, which is a small piece of a data-center deal and a large piece of a warehouse deal. The building is sometimes abated on a sliding scale, 100 percent and then 80 and then 60, which means the hole changes every year. The equipment — the servers, the cooling, the power gear — is sometimes classified as personal property and abated under a different statute than the real estate. Personal property moves. It is replaced on a cycle. A deal that abates “all personal property for twenty years” can waive machines that have not been bought yet. The assessor may not know next decade’s machines. The term sheet may still waive them. If you only type this year’s equipment, say “this year.” If the deal waives replacements, the multi-year total from this year’s value is a floor, not a ceiling, unless depreciation outruns the replacements. You will not get that right from a rendering. You might get it right from the depreciation schedule and the replacement clause. Ask for both.

Power is the other exhibit. A data center can be a tax story and an electric-utility story at the same time. A substation, a new line, a special rate, a demand that crowds other customers: none of that is in the millage box. Do not stuff it in. If the utility is building for the campus and the cost is socialized across ratepayers, that is a second gap, priced in electric bills, not in mills. Mention it as a second gap if you have the utility docket. Do not invent a millage that “includes” the power bill. You will confuse the treasurer’s hearing with the utility commission’s hearing, and those are different rooms with different notice rules. This page is the property-tax room. Stay in it unless you have labeled the door you are walking through.

Jobs clauses and clawbacks belong in the hearing and not in the multiplication. A deal that requires a headcount, a wage floor, or a clawback if the company leaves is a different kind of promise than a waiver of value. The waiver happens on the roll even in a year when the jobs are real. The clawback happens later, if anybody enforces it, and often recovers only a piece. This page will not score the jobs. It will not know whether the jobs were moved from the next county. It will not know whether construction work was counted as permanent work. Those are fair questions for the podium. Ask them after you have said the size of the hole. A jobs claim that is never set beside the hole is a press release. A hole that is never set beside the jobs is a panic. The room can hold both numbers. Insist that it does.

Walk the invented campus once, then throw it out

Abated value $800,000,000.00. That is the piece inside the fence that the example treats as off the roll. Millage 15.25, which is a stacked rate you should replace with the mills that are actually exposed in your deal. Annual forgone tax $12,200,000.00. I want that number to feel like a budget line, not like a speech. It is larger than a road resurfacing in a small county and smaller than a state education budget. Scale is the point of doing the arithmetic in public. Remaining base $3,400,000,000.00. The shift of about 3.5882 mills is what it would take, on that base, to refill $12,200,000.00. $358.82 per $100,000 of remaining taxable value is the household-scale version of the same shift. $183,000,000.00 is fifteen quiet years of the same annual hole, said out loud so the quiet cannot pose as zero.

Nothing in that paragraph is a forecast of your electric bill, your school rate, or your resale value. A campus can raise nearby values by bringing a water line, or depress them with noise and diesel yards, or do neither. Assessed value of the neighbor’s house is a different tool, the assessment-jump page, and it should be fed with the neighbor’s notice, not with this campus. Do not add the abatement shift and a reassessment jump and call the sum “what the data center did.” You would be adding a hypothetical rate increase to a valuation event and blaming a building for both. Maybe the building is entangled with both. Prove the entanglement with the notices. The calculator will not prove it for you.

When you replace the example, keep the units straight. Assessed value, not the company’s press-release “investment.” Investment can include equipment that is abated, equipment that is not, and costs that are never assessed at all, such as a training program or a land option that failed. Mills, not a percent, unless you convert. An effective rate of 1.525 percent is 15.25 mills. Type one. Years, as the years the value is actually waived, not the years the company says it will “be a partner in the community.” Partnership is not a term. The exhibit has a term. If the exhibit says “up to fifteen years,” fifteen is a ceiling. A ceiling is not a year-one bill. You may still show the ceiling, labeled as a ceiling, because ceilings are what get voted and then forgotten.

Partial abatements and the value that stayed

Many deals are partial. Fifty percent of the building for ten years. A sliding scale. A taxable floor that says the company will always pay tax on at least a stated value. In every one of those deals, the abated value is the part that is missing, not the whole campus. If the campus is assessed at a billion and half is waived, type five hundred million, not a billion. If you type the whole campus, you will describe a hole twice as deep as the ordinance. That mistake helps a critic and fools a reader. Do not do it. If you cannot see the waived portion because the memo only prints the investment, you are not ready to publish a number. You are ready to ask a question. Ask it at the hearing. “What assessed value, in dollars, is off the roll in year one, year five, and year ten?” Write the answer down. Then come back to the boxes.

The remaining base should not include the waived value. It should include the taxable leftover of the campus if there is one. Leaving the leftover out makes the shift look a little heavier than it is, because you have shrunk the base that would share the hole. Including the waived value in the remaining base makes the shift look lighter, and it double-counts a fantasy in which the waived value both pays and does not pay. The definition is fussy because the result is a rate. Rates are how neighbors actually get billed. A sloppy base is a sloppy bill. If your remaining-base figure is the whole county roll from last year’s abstract, subtract the waived value before you type it, unless the abstract was already net of the deal.

A taxable floor, or a PILOT that rises with the year, means the net hole is smaller than the gross waiver. Compute the gross if you want to see the statute’s generosity. Compute the net if you want to see the treasurer’s loss. Say which one is on the screen when you speak. A PILOT of two million against a gross hole of twelve million is a net hole of ten million, not a gift of two million and not a loss of twelve. People will try to quote the version that fits the sign they already painted. You can decline to help them. The page will show whatever value you type. Your mouth has to supply the adjective. Gross. Net. Ceiling. Year one. Those adjectives are the difference between a tool and a leaflet.

The hearing, the neighbor, and the company in the same room

If you live on the remaining roll, you are allowed to ask who invited the gap and who services the trucks that will roll to the gate. The company is allowed to answer with the payroll, the construction, the power contract, and the tax it does pay on the portion that was not waived. The board is allowed to say the alternative was a site in the next state. None of those sentences erase the annual forgone tax, and none of them erase the figure you compute for your own deal. Put the figure in the first minute, before the renderings. Then let the other sentences have the rest of the hour. A hearing that never states the hole has not informed the public. A hearing that only states the hole has not informed the public either. Information is both. This page is built for the half that memos skip.

If you are the company or the economic-development office, run the page before the open house. If the number shocks you, the room will be shocked too, and you should arrive with the PILOT, the reimbursement, the depreciation, and the jobs exhibit already subtracted or placed beside it. Surprising the room with a waiver and then calling the room emotional is a choice. You can make a different choice: put the gross hole on the first slide, the net hole on the second, and the remaining-base shift on the third. People can dislike the deal and still trust the messenger. Trust is worth more than a rendering, and it is cheaper than a clawback fight five years from now because nobody understood the term.

The data center in the boxes is fictional. The results show forgone property tax at the millage you type, not a prediction that any board will raise a rate. Ryan Standley wrote this page as Publisher / Authorized Officer of Notice Nearby. Notice Nearby is a paid public-notice register operated by Record of Sale, LLC, an Oregon limited liability company. This is an educational illustration. It is not a tax bill, not an appraisal, not a levy certification, not official debt math, and not legal, tax, or financial advice. Nothing here is Legal Publication, and a calculator does not satisfy a newspaper statute or any other notice statute.