This week, three Effingham County agencies promised lower taxes for homeowners due to part of a windfall from OpenAI. Next week will bring the details — and questions about what to do with the rest of the money expected from a complicated and unfinished transaction.
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About $350 million is sitting in the bank account of the Effingham County Industrial Development Authority, since it sold about 1,440 acres in the Savannah Gateway Industrial Hub near Rincon to Octans Georgia, OpenAI’s local affiliate.
That’s a lot of money for an obscure, unelected public board to control.
To put it in context, $350 million would run the whole county school system for more than a year. It’s enough to operate the county itself for four years.
With part of the money, the development authority proposes waiving the property taxes it collects for 15 years — that’s about $8.6 million per year right now. And it proposes transferring $90 million to the school system and the county over three years so those two agencies can each cut their millage rates as well.
On an owner-occupied home valued at $300,000, the total proposed six-mil cut would amount to a property tax reduction of $720 for at least three years. The school board, development authority board and county commission are all set to work on the details at meetings on Monday and Tuesday.
But there’s liable to be more money available even after transferring $90 million to the school and county and the 15 years of the development authority suspending its taxes. At today’s values, all that only sums up to $219 million.
The development authority declined to comment on what amount of money they expect to be left over after these current pledges.
“Related to how proceeds from the sale will be utilized, ECIDA has nothing more to add at this time beyond what was included within the recent press release shared with you. Community partnerships and related community investments will be announced in the future,” read an email from the authority.
Some critics of the OpenAI deal have started to argue that if the power-hungry data center must be built, the money should be used to fund the county’s hospital and other infrastructure, as well as ending the development authority’s property tax power forever and making it a self-funding agency.
Some counties’ development authorities are self-funding.
OpenAI has promised to spend $80 million in some way for community benefit; it’s unclear if that money would come from these sales proceeds. The company did not respond to a request for comment on this story.
The most powerful politician in the area, Georgia House Speaker Jon Burns, has led a state House GOP war on homeowners’ property taxes through legislation and public votes. The Newington Republican has broadly pursued sales taxes to make up the difference rather than leaning on data centers or land sales.
Still, he takes credit for the suggestion to cut tax rates now, which he shared with his colleague, state Rep. Bill Hitchens, R-Rincon.
“When the IDA announced the land sale, Chairman Hitchens and I knew it presented a historic opportunity for local officials to return that money to the taxpayers of Effingham County, which is exactly why we suggested a property tax relief plan to our local leaders,” Burns said in a written statement to The Current GA.
“When large-scale developments are approved by local governments and commit to investing in a community, they should deliver the greatest possible benefit to the residents who call that community home. This model has the potential to be replicated across our state and the nation as other communities experience similar growth.”
While this opportunity for tax relief is unique to Effingham County, Burns wrote, the state House remains committed to pursuing property tax cuts for homeowners across Georgia.
At least one more land transfer looks likely to be necessary to complete the OpenAI deal. In order to extend a promised 15-year, 50% property tax break to OpenAI, the development authority would also need to reacquire title to the land (though not control of the land). It’s unclear when that transaction might take place and, how much money, if any, would change hands.
