Newnan Mayor Warns State Tax Changes Could Whipsaw City Budgets

As state lawmakers debate changes to Georgia’s tax structure, Newnan Mayor James Shepherd said frequent revisions are making it difficult for cities to plan long term.

“There’s this proposal at the state level to screw around with the tax structure again, and so we can’t actually plan anything,” Shepherd said in a recent interview.

While Shepherd said Newnan is in a relatively strong position because of its diversified mix of residential and commercial development, he cautioned that rapid or sweeping changes — particularly proposals that would significantly reduce reliance on property taxes — could create instability for municipalities.

“It’d be one thing if they could keep these plans in place for five years and see what it looks like,” he said. “But they’re changing it after one to two years.”

Newnan, like other Georgia cities, relies on a combination of property taxes and local-option sales taxes, including SPLOST and other voter-approved mechanisms. Shepherd said he would like to reduce Newnan’s property tax rate over time, but only in a way that preserves financial stability.

“I do want to cut our property tax rate,” he said. “But to have this total shift all at once is just wildly irresponsible.”

He expressed particular concern about shifting too heavily toward sales tax revenue, which can fluctuate sharply during economic downturns.

“When you look at the tax receipts in any downturn, I’m very concerned… that relying fully on that sales tax model is going to put us in a really weird and really bad position in terms of planning,” Shepherd said. “I think it’s going to force a lot of municipalities into debt.”

Shepherd also questioned whether a heavier reliance on sales taxes would redistribute costs in unintended ways.

“If we move towards the sales tax model, you also have a lot more of that going to renters who are… statistically lower income than the property owners,” he said.

He said many municipal budgets are largely driven by essential services, limiting how much spending can realistically be reduced.

“The main things that we’re spending money on are police and fire,” Shepherd said.

While acknowledging that tax cuts are politically popular, Shepherd said proposals should be accompanied by clear discussions about how cities will fund core services if revenue streams are reduced.

For now, Shepherd said Newnan officials are monitoring developments at the Capitol and communicating with other city leaders about potential impacts.

“Give us some time to figure out what’s going on,” he said. “It’s the easiest thing to promise lower taxes, but… we’re going to bankrupt some cities if we keep on doing this stuff.”