Georgia’s budget includes a big payday for taxpayers

The General Assembly supercharged an election-year tax-cutting binge Wednesday, approving a revised budget that aims to return $2 billion to taxpayers — with some families potentially receiving checks totaling $1,000 or more.

The windfall is even better for state workers and teachers, who will get one-time bonuses of $2,000. On top of that, Republicans in the state House of Representatives approved a bill that would cut the income tax rate to below 5%.

“The winners in this budget are the taxpayers of Georgia,” Sen. Blake Tillery, R-Vidalia, told his colleagues. “This budget returns money to them.”

House and Senate negotiators unveiled a final $43.7 billion amended 2026 budget early Wednesday. By the early afternoon they had approved the package and sent it to Republican Gov. Brian Kemp, who is expected to sign it into law.

The package gives lawmakers plenty to brag about heading into a midterm election in which every statewide office and every seat in the Legislature is up for grabs. It includes $409 million for a new mental health hospital, $150 million to add bed space at state prisons and $325 million for the Georgia DREAMS need-based college scholarship program.

The budget contains a $1.2 billion income tax rebate — the latest in a series of rebates lawmakers have approved in recent years. Single-filers will receive up to $250, heads of household will get up to $375, and married couples filing jointly will get up to $500.

It also includes $850 million in property tax relief that will flow through local governments. Supporters say the average homeowner will get about $500.

Republican legislative leaders say they aren’t finished. The Senate wants to phase out the individual income tax altogether. Meanwhile, the House hopes to phase out the property tax on single-family primary residences. Both proposals come as the cost of living has become a top concern of Georgia residents.

To make the spending binge possible, Kemp raised his estimate of state revenue for this year by nearly $1.4 billion. That likely will further reduce but not deplete the state’s ample budget reserves.

Kemp hailed the budget as evidence the state’s “conservative fiscal leadership” continues to pay off for Georgians.

“As companies continue to expand or relocate to the Peach State, we have seen an increase in economic activity that has paid dividends in our state revenues,” the governor wrote in a letter to the Appropriations Committee chairs in both chambers. “That growth has enabled us to make historic investments in infrastructure, economic development and capital needs over the past three budget cycles while also passing historic tax relief and returning more than $9.7 billion to Georgia’s citizens.”

The budget won overwhelming support in both chambers Wednesday. But another tax-cutting measure proved more controversial.

Kemp’s House Bill 1001 would reduce the state income tax from 5.19% to 4.99% this year. It’s the latest in a series of tax rate cuts approved in recent years.

Supporters said the measure will provide additional tax relief to Georgians by returning excess revenue to the people who earned it.

“It’s not the government’s money,” said Rep. Will Wade, R-Dawsonville, the bill’s sponsor. “It’s the people’s money.”

Democrats said the measure will primarily benefit the wealthy, while providing little relief to low- and middle-income Georgians and potentially jeopardizing future funding for services.

“This is yet another tax cut for the wealthiest in Georgia who don’t necessarily need it,” said Rep. Sam Park, D-Lawrenceville.