Georgia Governor Brian Kemp has approved amendments to the state’s budget, enhancing expenditures in key areas like Hurricane Helene relief and state income tax rebates. The revised budget, which spans the remaining part of the fiscal year ending June 30, includes increased investment in Georgia’s struggling prison system. “This budget provides crucial relief to citizens affected by Hurricane Helene, enhances safety in our schools and communities through strategic investments, and puts money back in the pockets of taxpayers,” Kemp stated during the signing of House Bill 67.
Georgia plans to increase its state spending by $4.4 billion, driven by unexpected tax revenues that exceeded initial estimates, and the utilization of an $11 billion surplus. The total state budget will approach $75 billion for the year, taking into account $40.5 billion in state-specific funds and federal and other funds which include college tuition.
One of the key highlights is the $862 million allocated for Hurricane Helene relief. The hurricane wrought extensive damage across Georgia’s eastern regions in September. Part of this relief package includes $185 million in low-interest loans to aid farmers and clear trees from private property, preventing future fire hazards. Additionally, $25 million is earmarked for grants through nonprofits to assist individuals.
The revised budget also addresses costs involved with debris cleanup, grants for rural hospitals in affected regions, replacing educational materials in public libraries, and covering the $100 million revenue shortfall from the suspension of transport taxes when a gas tax holiday was declared by the governor.
The state has also allocated $1 billion for state income tax rebates, contingent on the Senate’s approval of House Bill 112, following its unanimous passage in the House. Anticipated rebates could return up to $250 to individual taxpayers, $375 to heads of households, and $500 to married couples. The refunds, however, will not exceed each taxpayer’s total tax contribution, potentially reducing benefits for low-income individuals. These rebates will be automatically processed if the bill is enacted.
Georgia’s flat income tax rate is set to decrease to 5.19% retroactively effective from January 1, as per House Bill 111, which passed the House and now awaits Senate consideration. The tax rate, which had already been cut to 5.29% this year, is expected to decrease annually by 0.1% until reaching 4.99%. Republican leaders, citing financial surpluses, have pushed for accelerated rate reductions, targeting a 5.19% rate for income earned in 2025.
Administration estimates indicate the state government could forgo approximately $149 million in revenue this fiscal year and subsequently $744 million annually. Most taxpayers will notice a minor impact, such as a $30 tax reduction for an individual earning $44,000 annually. This potential revenue shortfall has drawn criticism from Democrats, who argue it favors wealthier residents and neglects necessary public services.
Lastly, $346 million has been earmarked to bolster the spending on Georgia’s prison system. Emphasizing the need to tackle inmate violence, contraband issues, and staffing shortages, this funding will support hiring new correctional officers, aided by reduced staff turnover following previous salary hikes. The budget also includes $80 million for establishing four new 128-bed modular prison units, which will facilitate the renovation and improvement of current facilities with more secure infrastructure.
