As state tax revenues decrease, Georgia Gov. Brian Kemp is raising spending while lowering taxes. He claims he will be able to continue on this path thanks to the state’s billions of surplus funds.
On Tuesday, the Republican governor approved a $36.1 billion budget that will increase public school teachers’ and state employees’ compensation while increasing spending on mental health, health care, and education. The budget will take effect on July 1.
The total amount the state will spend, including federal funds and additional expenses like college tuition, is $66.8 billion.
Kemp stated that this year’s legislative session “offered something for everybody” when speaking to reporters at the state capitol following his signature on the budget.
Rainy Day Fund reserves of Georgia total $5.4 billion, fully funded to the maximum allowable amount of 15% of state revenue. In addition, it has $10.7 billion in excess funds amassed over three years. Kemp’s plan to use over $2 billion of the surplus for adjustments to the current budget, which expires on June 30, was approved by lawmakers. However, it would still leave almost $8 billion in savings.
Kemp said that to keep his pledge to lower the state income tax rate while keeping expenditure levels higher, it was critical to hang onto that money.
“We also want to be prepared in the future with our commitment to continue to cut taxes, which we have a plan to take the rate down below 5%,” Kemp said. “So to be able to do that, we’ve got to fund our priorities, but also budget within our means and balance our budget. And that’s what we did this year.”
Beginning on July 1, public school teachers will receive a $2,500 wage increase, potentially raising Georgia’s average yearly teacher salary to $67,000. Furthermore, Kemp distributed a $1,000 bonus in December on top of that. Teachers of preschoolers would also receive a $2,500 pay increase.
Employees of the state and universities would also receive a 4% pay raise, up to a salary of $70,000. The average salary for a state employee is $50,400.
A few workers would receive more. In addition to the $6,000 special bonus they received last year, state law enforcement officers would receive an additional $3,000 raise. Additionally, child welfare personnel would get salaries of $3,000 more.
The state will spend an additional $104 million on school security, including $45,000 in subsidies to each school, and $200 million more to school districts to assist them in purchasing and operating school transportation.
Additionally, healthcare providers will benefit. The state plans to increase its payments to physical and occupational therapists, some physicians, dialysis providers, home health care providers, and nursing homes by more than $160 million.
The budget for the following year will actually be $1.8 billion smaller than it was this year after lawmakers and Governor Brian Kemp added billions of dollars in one-time funding, including roughly $400 million for renovations to the Georgia Capitol and a new legislative office complex. In the 2019 budget, the state already intends to rely on the surplus in addition to paying cash for new buildings and equipment rather than borrowing as usual.
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