Georgia House budget writers on Wednesday backed Gov. Brian Kemp’s plan to provide about a $1 billion property tax cut as part of the state’s midyear spending plan.
House members have already filed legislation to also provide a $1 billion income tax rebate that Kemp has proposed.
Wednesday’s approval was one of the first major policy votes of the 2023 session and a sign lawmakers want to get the budget — and tax breaks — approved quickly.
The House Appropriations Committee approved much of Kemp’s proposed $32.5 billion midyear budget, which runs through June 30. It builds on consecutive years of massive tax surpluses the state has seen since the COVID-19 economic shutdown ended in the spring of 2020.
The full Republican-led House is expected to back the midyear spending proposal Thursday and then send it to the Senate for its consideration less than a month into the 2023 session.
“Our state has a long history of conservative fiscal management — and this year is no exception,” said House Appropriations Chairman Matt Hatchett, R-Dublin. “With the additional funds that are being recognized in this budget, the House joins the governor on the wise use of tax dollars with one-time needed investments in technology, capital and economic development projects, as well as human capital investments.
“There are many areas where we agree with the governor on this budget.”
If given final approval, homeowners would receive an extra one-time exemption on the value of their homes at tax time, a move that Kemp said last month would save those Georgians, on average, about $500.
Kemp proposed a $20,000 exemption on the taxable value of homes. Turns out the state constitution allows only up to an $18,000 exemption, so there may be a slight difference in the size of the tax break.
Under legislation the House is considering and Kemp proposed, many Georgians would also receive an income tax rebate, as they did last year — $500 per married couple who file jointly.
The midyear plan also includes $139 million to provide each school with a $60,000 safety grant, and it would increase spending in dozens of other areas, such as health care, rural workforce housing development and public safety.
Kemp had proposed a massive infusion of money into the State Health Benefit Plan — which provides health care coverage to more than 600,000 teachers, state employees, retirees and their dependents — to address expected future deficits. School systems have raised concerns about the portion of the increase they would have to pay into the system for staffers, so the House decided that part of it would be phased in over three years. And the House kicked in $100 million of the cost.
The state has attracted two major electric-vehicle plants, and Kemp proposed spending $130 million for programs to train workers in the midyear budget. The House plan would fund $56 million of that — for a Rivian training program — in the coming year.
The House spending plan includes the $167 million that Kemp proposed for regional business assistance grants, including for the Rivian and Hyundai car plants.
The House added money to give 54,000 state government pensioners one-time bonuses of $250 to $300. Hatchett said he is hoping the Senate will find money to add to those bonuses.
The state can afford the increased spending because tax collections have been on a roll since mid-2020.
The state had a record surplus in fiscal 2021 and then had another record surplus, about $6.6 billion, for fiscal 2022, which ended June 30.
Kemp is hoping for another surplus — what’s left over when all the bills are paid at the end of the fiscal year — in 2023, despite an expected decline in income tax collections due to last year’s stock market drop.
State tax collections have been on the rise since shortly after the beginning of the COVID-19 pandemic, when Congress first approved massive spending on federal aid. Inflation has helped boost sales tax collections, with goods costing more and the taxes on them rising, and wages have also increased as unemployment hit record lows and businesses scrambled to fill job openings.
About the Author
