Gov. Brian Kemp’s budget proposal is expected to include another round of pay raises for more than 200,000 teachers, education staffers and state employees in the coming year.
As expected, the governor will also put his political weight behind $2 billion in income and property tax rebates and transportation funding to replace the revenue lost during the nine months that the state didn’t collect its gas tax.
The pay raises come after Kemp and lawmakers hiked state employee salaries $5,000 last year to help combat rampant turnover in many agencies. Teachers received $2,000 raises from the state, which helps fund local K-12 education in Georgia.
The governor will announce some of his budget proposals for the coming year during his inaugural address Thursday, including the size of the pay raises.
In recent years low salaries in some departments — such as those dealing with corrections and child welfare — and the availability of higher-paying private-sector positions have made agencies desperate to hold on to staffers. Lawmakers, in turn, have generally accepted that the state has to pay higher salaries to keep workers, something that took a back seat for years during and following the Great Recession.
As he starts his second term, Kemp has a lot of financial flexibility because the state has been awash with tax money.
After all the bills were paid and agencies returned leftover funds, the state’s surplus for fiscal 2022, which ended June 30, was about $6.6 billion, The Atlanta Journal-Constitution reported in September.
Kemp wants lawmakers to back an income tax refund — similar to the one this year that meant $500 for joint filers — and a property tax break that he said would save homeowners about $500. Combined, it would eat up about a third of the surplus.
Suspending the state gas tax last spring in hopes of easing the impact of rising fuel prices cost the state more than $1 billion in 2022. Kemp reimposed the tax — which is paid by gas distributors and passed on to drivers — as of Wednesday. The money goes to road projects, and Kemp wants to use surplus funds to reimburse the Georgia Department of Transportation.
“We’re going to use our excess reserves to backfill the transportation money that was lost by suspending the gas tax so we can continue to keep our freight and logistics relief projects moving forward,” Kemp said during his speech at the annual Eggs & Issues breakfast Wednesday.
Kemp also said Wednesday that he wants to include more money in the budget for workforce housing projects.
“We’ve got to move the needle on workforce housing in our state,” Kemp said. “My budget proposal will have money for a local-state partnership to start tackling the workforce housing issue we’ve seen.”
In the first five months of this fiscal year, tax collections were up 6.2%, or $742 million, over the record-breaking fiscal 2022 numbers, despite the gas tax suspension that lowered revenue by $150 million to $170 million a month.
State income tax collections have been on the rise since shortly after the beginning of the COVID-19 pandemic, when Congress first passed massive federal aid spending. 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.
Staff writer Greg Bluestein contributed to this article.
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