(The Center Square) – Georgia data centers consume so much electricity that they could generate millions in utility franchise fees for counties and serve as a gateway to lower property taxes, if a state law is changed, according to county officials.
Franchise fees are a rental of a right-of-way paid to cities by utility companies in Georgia. Electric companies pay 4% but the amount can vary, according to Clint Mueller, deputy director of the Association of County Commissioners of Georgia.
Only cities can collect franchise fees from utilities, except for cable, but just 45% of Georgia’s population lives in cities. If counties could collect these fees, it would add millions to their coffers, according to the association.
Data centers entered the equation because of the large amounts of electricity they consume, which is one reason for the public backlash against them, Mueller said.
“If we can capture the revenue off of these data centers and use it to lower property taxes and use it to pay for services that our citizens want, I think that’s sort of the silver lining if they may not be able to prevent a data center but if they’re going to get one, at least give them some benefit of having a data center in their community,” Mueller said in an interview with The Center Square.
While it would be hard to predict how much revenue counties could collect, Georgia’s cities collected $250 million in franchise fees alone, said Keenan Rogers, governmental affairs associate for the Association of County Commissioners of Georgia. Franchise fees account for 47% of city budgets, Larry Hanson, CEO and executive director of the Georgia Municipal Association, told the Georgia House Blue Ribbon Study Committee on Local Government, Taxation, Funding and Budget at its July 22 meeting.
Bartow County Commissioner Steve Taylor said he is pro-data center because of the revenue they can bring in to counties. He advocates allowing counties to collect franchise fees.
“And if we get a franchise fee, especially with the property tax that we can collect from some of these large electric users, I’ll pledge to you that those county property taxes, as these companies come online, we will eliminate most of the residential property taxes,” Taylor told the study committee. “My goal would be to get to zero.”
Taylor said he wasn’t speaking for the local school board of the state’s other 158 counties.
“We need local control and if you can enable us to do that, it would be much appreciated,” Taylor said.
Rep. Mitchell Scoggins, R-Cartersville, was one of the sponsors of House Bill 1384, which would have given counties 25% of the franchise fees collected by Georgia’s cities.
The bill failed to pass the General Assembly before it ended in April.
“The pro that came out of it was it shed light on this issue, and everybody realized that we need to take a step back and fully crack this open,” Rogers said.
The debate over county collection of the fees goes back a long way, according to Mueller.
“When the original franchise fees were debated back in the late 1800s or early 1900s, typically you couldn’t get utility services unless you lived in a city,” Mueller said. “As we continued to develop the rural areas of the state, they didn’t want to put any sort of impediments on getting these utilities in the unincorporated area. So I think that’s what happened over time is cities got in early and they got their franchise fees established early on. Counties were just begging for utilities to come there and they didn’t want to impose any kind of franchise fees.”
It’s not the first time Georgia lawmakers have discussed franchise fees for counties. A joint study committee looked at them in 1998, according to a transcript on the General Assembly’s website.