ATLANTA (AP) — Georgia will boost spending by $4.4 billion in the last three months of the current budget year under the spending plan released Thursday by Gov. Brian Kemp.
But the Republican is projecting that state revenues will barely budge in the 2026 budget year that begins July 1.
State lawmakers originally agreed to spend $36.1 billion in state money this year, but Kemp wants to boost spending to $40.6 billion, or 12%. Some of that additional money would come from growth in tax revenue, but Kemp would also crack open state savings accounts to spend another $3.1 billion. The state has more than $16 billion in reserves, including $5.5 billion in its rainy day fund and $11 billion in other surplus cash.
Here’s a look at some major themes:
As he has in most of his previous six years, Kemp is trying to hold down commitments to new ongoing spending in the state budget. Although he's ready to spend heavily out of the surplus for an income tax rebate and other projects, Kemp is projecting the state will collect less revenue in the current year and in 2026 than it did in 2024. That in part reflects caution about ongoing income tax cuts, which Kemp wants to prioritize. Speeding up income tax cuts could cost the state more than $1 billion in foregone revenue by June 2026.
“Just because we take in more money doesn't mean we need to create new big government programs to fund for eternity,” Kemp said Thursday in his state of the state speech.
Kemp and other state leaders have emphasized the importance of aiding local governments and individuals after September's Hurricane Helene cut a swath across the eastern half of the state from Valdosta to Augusta. Kemp wants to spend $615 million on aid and give tax breaks to farmers and timber growers that could be worth roughly $450 million.
The state would set aside $200 million to cover costs that the Georgia Department of Transportation already paid for repairs after Helene and other storms. That money should eventually be repaid by the federal government. The state would also put aside $150 million to pay state and local matches to access federal disaster funds.
The state already shifted $75 million to provide disaster relief loans to agricultural businesses and $25 million to clean up downed timber. The money had been set aside for construction projects or paying off debt and Kemp would replace the $100 million. Kemp would also send $99 million to the Georgia Department of Transportation to make up for a two-week holiday on gas and diesel taxes.
The governor wants to give tax breaks for replanting timber and rebuilding chicken houses and to exempt federal disaster relief to farmers from state income taxes. That could cost $450 million in foregone revenue.
Kemp is proposing to again pay for construction and renovation using the state's surplus cash instead of borrowing money. The governor proposes spending an additional $709 million in the amended 2025 budget and $867 million in the upcoming 2026 budget. Officials say by paying cash, Georgia will avoid $1.5 billion in interest payments over 20 years.
Among projects proposed are $100 million for a new medical research building at Augusta University, $25 million for a new medical school building at Mercer University in Macon, and $25 million for a new academic building at the Morehouse School of Medicine in Atlanta.
The state would also spend $47 million to buy new ballot scanners and printers to remove machine-readable barcodes previously used to count ballots.
The governor wants to spend $502 million to help fund a plan to withdraw surface water from the Savannah River to supply water to Savannah and surrounding counties, including the new Hyundai Motor Group plant in Ellabell. That would ease concerns about new wells for Hyundai and other developments depleting the underground water supply that much of coastal Georgia and South Carolina rely on.
Kemp would also spend an additional $530 million on transportation projects to help move freight, $250 million to help cities and counties maintain roads and bridges, $60 million for grants and loans for local transportation projects and $250 million to fund loans for local water and sewer work.
