Kemp budget: Good times roll for state with huge funding boost for schools

Gov. Brian Kemp aims to boost spending on schools by more than $1 billion. Hearings will be held next week on his budget proposals. Bob Andres /

Gov. Brian Kemp aims to boost spending on schools by more than $1 billion. Hearings will be held next week on his budget proposals. Bob Andres /

Gov. Brian Kemp’s budget plans for the upcoming year make clear that state government remains on a financial roll nearly three years after the COVID-19 pandemic shutdown.

Kemp on Friday released proposals that call for an increase of more than $1 billion in school funding, $567 million in pay raises, tax rebates, a bump in HOPE scholarship spending and big money to train workers for jobs in the electric-vehicle industry.

His budget proposals now head to the General Assembly for its consideration, with hearings scheduled for next week.

Kemp on Thursday announced plans for a $2,000 pay raise for more than 200,000 Georgia teachers, state and university employees, in part to fight high turnover rates.

That alone would mean a big boost in education funding, but Kemp said his proposals also would fully fund the state’s school spending formula and provide extra to help children who fell behind during the COVID-19 pandemic. He would also spend money on school safety, help more paraprofessionals become certified teachers and increase spending on school counselors.

The governor is proposing that homeowners receive an extra one-time exemption of $20,000 on the value of their homes at tax time, a move that he said would save those Georgians on average about $500. Many Georgians would also get an income tax rebate, as they did last year.

Kemp’s proposal would put an extra $61 million into making sure the HOPE scholarship pays 100% of tuition for recipients, a move that he said would save full-time students an average of $444 a year.

More than $200 million would go toward two programs designed to ensure more Georgians can get health insurance and to lower the cost of coverage.

Millions of dollars would go for additional mental health and substance abuse crisis centers and mobile teams. An additional $1 billion would be pumped 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 potential future deficits.

The governor wants to put tens of millions of dollars into a new statewide public safety agency radio system, into expanding prison space, and repairing and maintaining current facilities.

The state has attracted two major electric-vehicle plants, and Kemp’s budget proposal would spend $130 million for programs to train workers. He also wants $167 million for regional business assistance grants.

“While economic uncertainty remains present, through conservative fiscal stewardship we can continue to grow,” Kemp wrote in his budget report to lawmakers.

“It is only through the sound decisions made in previous years that we have the opportunity to address new challenges and deploy innovative solutions,” he wrote. “The budget will continue to prioritize spending in the areas that matter most to the citizens of this state: education, healthcare, public safety, workforce development, and economic development.”

Kemp starts his second term with the kind of fiscal flexibility no governor in recent times has had.

His budget proposals were released two hours after he announced that December tax collections had risen. For the first half of fiscal 2023, collections are up 6.5%, or $966.7 million, over the same period the previous year.

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.

The state is hoping for another surplus — what’s left over when all the bills are paid at the end of the fiscal year — in 2023.

However, the governor’s budget office is projecting a decline in revenue this fiscal year. Officials say big capital gains from the hot stock market pumped up income tax collections in fiscal 2022. Income taxes were paid in fiscal 2022 based on 2021 earnings, and the Dow Jones Industrial Average rose 18.7% that year.

Now officials are projecting the state will collect substantially less from one of its main tax sources this year when Georgians file their tax returns.

State income tax collections have been on the rise since shortly after the beginning of the COVID-19 pandemic, when Congress first passed 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.