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Newnan Mayor James Shepherd is proposing a plan that would permanently eliminate city property taxes for nearly every owner-occupied home while restoring a lower property tax on businesses, rental properties, and other non-homesteaded property.
Newnan homeowners currently pay no city property tax after voters approved a one-cent sales tax last November and the Newnan City Council used that revenue to offset the property tax rate. Shepherd said the current arrangement provides relief, but no permanent protection.
“My goal is to keep property taxes at zero on every homestead in the City of Homes,” Shepherd wrote in a letter explaining the proposal. “Not this year. Every year, from now on.”
Under the current system, a future council could restore property taxes on homes through the city’s regular millage-rate process. Shepherd’s proposal would instead create a large homestead exemption through state legislation and a local referendum.
“A future city council could put your home back on the tax rolls with a few advertised hearings and a single vote,” Shepherd wrote. “Not a referendum. Not your signature. A Tuesday night vote by four people.”
How the exemption would work
Georgia cities cannot generally impose different millage rates on residential, commercial, and rental property. They can, however, provide homestead exemptions for owner-occupied homes.
Shepherd said during an interview this week at the Newnan location of The Oink Joint that the city could seek a homestead exemption of approximately $750,000 to $1 million. The final amount would be intended to exempt all or substantially all homesteaded property in Newnan.
“I would like it to hit all or substantially all of the homesteads in Newnan,” Shepherd said.
The city could then restore a property-tax rate of two mills on the remaining taxable property. That would primarily include businesses, rental properties, and homes valued above the exemption amount.
Because Georgia taxes property based on 40% of its assessed market value, a two-mill rate would amount to approximately 0.08% of the property’s market value each year.
That rate would be one-third lower than the approximately three-mill rate imposed on all taxable property in 2025.
For a home valued above the exemption, only the portion exceeding the exemption would be taxed. Shepherd said even owners of some higher-value homes would receive substantial protection.
“So almost every resident, their taxes drop to next to nothing on their property,” The Citizen said during the interview.
“Zero,” Shepherd responded.
Businesses and landlords would resume paying
The plan would increase city property taxes for businesses and landlords from the current zero rate. Shepherd argued that eliminating the millage rate for all property gave commercial property owners and landlords a benefit that was intended primarily for homeowners.
“We essentially had to give BlackRock a tax break,” Shepherd said, referring broadly to large corporate owners of rental homes. “We had to give them a tax break to give homeowners a tax break.”
Shepherd initially had concerns about replacing property taxes with a sales tax because lower-income residents spend a larger share of their income on taxable goods. He said two factors changed his view.
First, he said approximately 40% of the sales tax collected in Newnan is paid by people who live outside the city. Second, he said rising property values were creating unaffordable tax bills for longtime homeowners, including retirees living on fixed incomes.
“Newnan’s homeowners are not a wealthy class,” Shepherd wrote. “They are working people and retirees being priced out of their homes by tax bills.”
Renters also indirectly paid the former property tax through their monthly rent, he wrote. However, Shepherd said landlords received the benefit when the city property-tax rate fell to zero.
“When the rate went to zero, homeowners got relief, landlords got a windfall, and renters got left out,” he wrote.
Infrastructure drives the proposal
Shepherd said revenue from the restored property tax would be directed toward Newnan’s roads and other infrastructure.
A recent city infrastructure study identified approximately $45 million in existing or anticipated maintenance needs, he said. Shepherd emphasized that the amount is not formal debt but represents work that must eventually be completed.
“We essentially have a backlog of $45 million,” Shepherd said. “That is growing exponentially because of the way we’ve developed.”
The city is already projected to spend approximately $35 million on road improvements during the next decade, he said. Shepherd estimated that investing an additional $1 million annually would close the remaining $10 million gap over that period.
He said preventive maintenance is far less expensive than rebuilding a road after it falls into serious disrepair.
“To repair a street that’s in pretty good condition but needs some love is like $37,000 a mile,” Shepherd said. “To repair a street that has gotten into disrepair is a million dollars a mile.”
Shepherd connected the growing costs to decades of residential development. Roads initially built by developers eventually become the city’s responsibility, creating recurring maintenance expenses after the initial tax growth from a new subdivision has slowed.
“Every year, more roads built by developers for their one-time payday come onto the city’s balance sheet as a recurring cost,” Shepherd wrote.
He said investing earlier and rebuilding streets using more durable designs could eventually reduce Newnan’s annual maintenance costs.
“If we commit to rebuilding them the right way and repairing them the right way, we’ll actually start seeing our infrastructure costs drop rather than explode,” Shepherd said.
A buffer against an economic downturn
The proposed two-mill tax would also provide a stable source of revenue if sales-tax collections fall during a recession.
Shepherd said Newnan’s current revenue position is strong, but relying heavily on sales taxes creates risk during an economic downturn. A small, capped property tax on non-homesteaded property could prevent the city from needing to impose a much larger emergency property tax later.
“That low, capped rate is insurance against us being forced to impose a large emergency property tax if our sales tax collections decrease in a downturn,” he wrote.
Shepherd described the proposal as part of a longer-term effort to stabilize Newnan’s finances, maintain roads, and change the kinds of development the city approves.
His largest concern is that the city could adopt a better tax structure but continue approving projects that cost more in long-term services than they generate in revenue.
“We’ll make the right tax decision and the wrong development decision,” Shepherd said. “We have to be very conscious that we need to focus on both ends of that equation.”
He has proposed evaluating future rezonings and annexations by the amount of revenue they generate per acre compared with the services and infrastructure they require.
Voters would have the final say
The proposal cannot be completed through a council vote alone.
Shepherd said the council would first vote to request a local act from the Georgia General Assembly. If the legislation passed during the 2027 legislative session, the homestead exemption could then go before Newnan voters in a referendum.
If approved, Shepherd said the exemption and revised millage rate could potentially take effect in January 2028.
“Every step will be public, and the last word will belong to the voters,” Shepherd wrote.
Once enacted, removing or reducing the homestead exemption would require another trip through the General Assembly and another public vote. That process would make it considerably harder for a future council to restore taxes on owner-occupied homes without voter approval.
“Today your protection is whoever sits on council,” Shepherd wrote. “Under this plan, it’s you.”
Shepherd said he believes the proposal has a good chance of winning support from the council. He has also presented the concept to members of Newnan’s business community and said the response was positive, particularly after he explained that the revenue would be directed toward infrastructure.
“This is not a short-term proposal,” Shepherd wrote. “Getting all of this done will take state action and a couple of years to implement.”
For Shepherd, the proposal combines tax relief with a long-term financial strategy for the city.
“Safe, high-quality infrastructure, fiscally sound development that makes our community stronger, and no city tax bill on your family home is what supporting families in Newnan looks like to me,” he wrote.
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