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LaGrange has won an initial decision in the case challenging the city’s use of utility sales to pay for city operations rather than property tax but the plaintiffs say they intend to appeal to the state supreme court.

During the LaGrange City Council work session on Tuesday morning, City Attorney Jeff Todd provided an update on litigation against the city initiated by two Atlanta-based law firms, Hall & Lampros and Continuum Law Group, on behalf of plaintiffs Lonnie Hollis and Mason’s World Bar & Grill.

The firms filed a class action lawsuit against the City of LaGrange claiming that the revenue the city makes on utility sales and uses to operate city operations is an illegal tax.  The lawsuit was filed in Troup County Superior Court on Jan. 10, 2023.

“The class action suit seeks to make new law to prevent cities from making money in enterprise units like electric and gas, and using it to fund general services,” Todd said.

The city filed a brief to have the case dismissed, which was granted by Judge John Simpson from Carrollton on March 1.

Todd said the decision could be appealed within 30 days and the plaintiffs recently filed notice that they intend to appeal directly to the Georgia Supreme Court.

Court records indicated that the plaintiffs filed a notice of appeal in Troup County Superior Court on March 25.

City Manager Patrick Bowie noted that the good thing about the case going to the state supreme court is that it will allow for a statewide ruling to prevent similar cases going through other local jurisdictions.

If the plaintiffs win, it would prevent 300-plus cities in Georgia from subsidizing property taxes through enterprise funds.

The city has not collected property taxes since 1998 and instead uses proceeds from utility sales to fund city operations.

“If this was to go forward and pass, I don’t think a lot of people know, but this would equate to the largest tax increase in Georgia state history,” Councilman Nathan Gaskin said. “It affects more than just LaGrange.”

Todd said they don’t have calendar dates set yet for the potential appeal but indicated they intend to continue opposing the suit.