Project Zero: The Plan to Reduce Property Taxes for Georgia’s Effingham County Residents

As local residents across the country are expressing concerns about the rapid growth of data centers, one county in Georgia thinks it has a partial solution to offset those worries and make sure data centers pay off for local residents—by eliminating local property taxes.

In July, OpenAI announced plans to build a 3.2-gigawatt data center facility in Effingham County. The operation has come to be known as Project Camellia, and its implications for the county are far-reaching.

The $20 billion data center corresponds with a project the county has devised to eradicate residential property taxes completely by 2028 for qualified homestead properties.

Project Zero

The concept of using data centers to reduce or eliminate property taxes in the county has been dubbed “Project Zero.”

In a recent vote, Effingham County commissioners voted 4-1 to approve their portion of a proposal that allows for six mills in property tax relief, amounting to an estimated 30% cut for the average household.

Tim Callanan, the Effingham County manager, told the Daily Signal that the “six mills” of property tax relief roughly equates to $38 million. “Every mill is worth about $4.5 million,” he said.

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Callanan added that the total amount of property tax relief will be $27 million, and the leftover $11 million in the budget “will be used to zero out homestead taxes next year with the Local Homeowner Incentive Adjustment.” Georgia’s Local Homeowner’s Incentive Adjustment (LHIA) programs are a state and local initiative to provide property tax relief to qualified homeowners through local grant and adjustment programs.

He said that the idea for Project Zero really centers around providing tax relief to residents, and that the project “actually started before Project Camellia was announced.”

“What Project Camellia allows us to do is to speed this up,” Callanan said.

The county manager noted that the first couple of steps in the process included the referendum—referred to as the Local Homeowners Incentive Adjustment Grant—allowing leaders to take fiscal budget “surplus” and put it toward homestead relief the next year.

The next step was the Local Homestead Option Sales Tax, a “penny sales tax” where the “revenues that come in from it go to zeroing out homestead property taxes first, and then the remaining will be used for lowering everybody’s tax rate.”

The Benefits of Large-Scale Projects

Jared Walczak, a senior fellow at the Tax Foundation, told the Daily Signal that data centers bring many benefits to communities—especially financial ones.

“Data center investment creates a large local fiscal surplus,” he said.

Walczak explained that data centers are low-maintenance, and that while the goal of the project in Effingham County is to “eventually eliminate property taxes,” there are several ways they are going about this.

“[The county] may be exploring a local option 1% sales tax that the state has authorized to help reduce property taxes as well,” he said.

He added that taxes can be lowered when a sizable taxpayer is added to the equation, one that “uses very few services.” This creates a financial surplus for the locality.

When a large influx of “property tax revenue” comes in, the result is “a very large tax reduction for everyone else,” Walczak said.

Historically, data centers have raised concerns about energy costs, especially when it comes to large-scale operations, such as the one in Effingham County, Walczak said.

What’s Next for Effingham County Property Taxes

Callanan said that, looking forward for Effingham County residents, “The property tax bill should go out within the next month.” He added that the “average homeowner is probably going to see about a 30% reduction and businesses are going to see about a 20% reduction.”

After that, the referendum will be next on the ballot in November, which he said is an essential next step in the equation.

Looking into next year, Callanan added, “We move towards getting that LHOST [Local Homestead Option Sales Tax] passed and then hopefully implemented in the following year.”

Callanan noted that while “there was a tremendous amount of skepticism in the community … we are going to keep getting the information out there” to prevent residents from bearing the costs associated with the new data center.

He mentioned one other protection that should provide relief to locals. Because of the new rules put on Georgia Power by the Public Service Commission, the utility has to “agree with [the new rules]” regarding how officials and developers are “going to protect residences and small businesses from subsidizing large-load users.”

Will It Be Enough?

Despite the reduction or elimination of personal property taxes for qualified residents, the implications of the data center boom are more complicated, according to Republican strategist Katie Frost.

“A lot of the pushback people have to data centers is an underlying concern that they think it’s going to fundamentally change their lives, and they’re not sure how,” Frost told the Daily Signal

She continued, “The resistance to data centers is not resisting the actual building itself, but it’s more what it represents.”

Late last month, Sen. Raphael Warnock called for a moratorium on data center construction in Georgia, with exceptions, after hearing from Effingham County residents who voiced concerns about water use, potentially higher utility costs, and light and noise distractions.