South Fulton Mayor Carmalitha Gumbs says data centers are now a must-have for city revenue, declaring at a recent industry event that they represent the new reality for cities and an economic necessity. Her comments come just weeks after South Fulton let its roughly nine-month moratorium on new data center development expire, clearing the way for the very kind of projects that have triggered fierce backlash in neighborhoods across metro Atlanta and beyond.
Gumbs made her remarks at Bisnow's Atlanta State of the Market event, held Wednesday, September 30, at 1375 Peachtree, according to Bisnow. The mayor pointed to Loudoun County, Virginia — a major data center market that generated $1.1 billion in data center tax revenue in fiscal year 2026 and has used that windfall to help lower its property tax rate over the past decade — as the model she wants South Fulton to follow. She told the crowd she had visited Loudoun County herself, and argued that the six-month pause actually helped the city get its house in order, allowing South Fulton to become more business-friendly and thoughtfully welcome data center opportunities rather than rushing in blind.
Gumbs also pushed back on what she called misconceptions that data centers cause cancer and other harms, framing resident fears as largely unfounded. Her comments land amid a wave of organized resistance to the industry nationwide — at the start of 2026, 40% of 770 planned U.S. data center projects faced backlash, and roughly 25 proposals were scrapped altogether in 2025 due to community pushback, per Bisnow's reporting, even as big tech companies are projected to spend more than $700 billion on data centers this year.
New Rules Came Just Before the Moratorium Lifted
South Fulton’s moratorium ran for about nine months, from its adoption in December 2025 through September 9. Days before that deadline, the City Council moved on August 11 to enact Ordinance ORD2026-024, repealing and replacing the city's data center regulations with new zoning rules, permitting standards, and noise performance guidelines, according to the City of South Fulton. City officials have described the new framework as guardrails intended to protect neighborhoods and public infrastructure as development resumes.
A September 22 council meeting focused on the city budget. New data center developments require special-use permits and council approval, though how the city will enforce the ordinance's noise thresholds and permitting rules as specific projects move forward remains an open question.
Fulton County Says No to the Subsidies Driving the Boom
Fulton County, which includes both South Fulton and Alpharetta, currently has 22 data center projects in its development pipeline that together are expected to produce more than a gigawatt of power. But the county's elected leadership has broken with Gumbs' embrace of the industry: on August 5, the Fulton County Board of Commissioners approved a resolution opposing local tax abatements and financial incentives for data centers, urging development authorities to reject such subsidies over concerns about heavy power and water consumption, according to Fulton County. The resolution was sponsored by Commissioners Bridget Thorne and Bob Ellis.
The stakes are substantial. The Development Authority of Fulton County has granted local property tax abatements for data centers. That local fight sits inside an even larger one: Georgia's state and local sales tax exemptions on high-technology data center equipment are projected to cost $2.5 billion in forgone public revenue in fiscal year 2026 alone, a figure that surged 664% from earlier state budget projections, according to the Atlanta Journal-Constitution.
Doubts About Whether the Tax Breaks Are Even Necessary
Those numbers have fueled skepticism at the state level about whether the incentives are doing what they're supposed to. Governor Brian Kemp vetoed House Bill 1192 in May 2024, a measure that would have temporarily paused the sales tax exemption to study power grid impact; Georgia Power had noted that data centers accounted for 80% of its requested electrical demand growth, according to WABE.
Lawmakers tried again during the 2026 legislative session, introducing seven separate bills to curb data center development, including Senate Bill 410, which sought to end sales tax exemptions for new facilities. All of the major restriction bills failed, per Capitol Beat, and the 2018 sales tax exemption remains codified through 2031. The issue has since become a flashpoint in the 2026 Georgia governor's race, with Democratic nominee Keisha Lance Bottoms calling for a statewide construction pause and Republican nominee Rick Jackson arguing for local municipal authority to expand tax bases, WABE reports.
South Fulton Isn't the Only Battleground
Neighborhood resistance has flared across the region. Kwanza Hall said at the same Bisnow event that the AI and technology economy is driving people's lives and that communities must prepare for its economic impact, while Alpharetta Mayor Jim Gilvin — whose city already hosts 18 data centers — said the backlash is mainly tied to the intensity and scale of newly proposed facilities, especially AI computing centers. Gilvin added that AI can create risks for taxpayers and communities if laws and guardrails aren't respected, and argued local governments should instead pursue AI opportunities that save taxpayers money.
Hoodline previously reported on Marietta residents fighting a proposed 108-megawatt facility near residential zones, a dispute that echoes the same questions now facing South Fulton: whether the promised tax revenue is worth the strain on power, water, and patience in the neighborhoods closest to the servers.
