Kemp promises Georgians more help dealing with inflation next year

Credit: Jason Getz / Jason.Getz@ajc.com

Credit: Jason Getz / Jason.Getz@ajc.com

ATHENS — Gov. Brian Kemp told state lawmakers Tuesday that he wants to go beyond the tax cuts he’s already proposed to help Georgians deal with inflation.

In his first post-election address to lawmakers, a month before the General Assembly convenes for the 2023 session, Kemp touted his plan to refund about $2 billion of last year’s state surplus to taxpayers, an idea he touted on the campaign trail this fall.

He also noted that he has — on a monthly basis — suspended the state gas tax to cut fuel prices.

But he said Georgians are still dealing with record-high prices for goods and services.

“This past week, I consulted with both Senate and House leadership on how we will address this issue in the coming session to provide further relief,” he said, without hinting what form that would take. “Though gas prices are, thankfully, trending down for the moment, we’re taking nothing for granted.

“In the coming days, following my discussions with legislative leaders, we will publicly announce our plan for the coming session on how we can best provide inflation relief to hardworking Georgians.”

Lawmakers and soon-to-be legislators who won election last month began a three-day meeting in Athens on Sunday. The traditional biennial at the University of Georgia is designed to give new members of the House and Senate a chance to learn how the General Assembly works and meet Statehouse veterans, including lawmakers, staff and lobbyists.

Kemp easily won reelection in November, besting Democrat Stacey Abrams in a rematch of their much closer 2018 contest.

During his address Tuesday, Kemp largely stuck to campaign themes that helped him win another term, talking up job growth in Georgia, the overall strength of the economy, and his push for tougher measures to cut down on gang violence and sex trafficking.

Kemp has the financial flexibility to help Georgians fight inflation because state tax collections have been on a roll for more than two years.

Nothing, from talk of a national recession to the slumped stock market to rising interest rates, has so far dented Georgia’s revenue picture.

In the first four months of this fiscal year, collections were up 7.8%, or $744 million, over the record-breaking fiscal 2022 numbers, despite the fact that Kemp is continuing to suspend the gas tax to lower the price at the pump that Georgians pay.

That suspension costs the state — and saves drivers — $150 million to $170 million a month.

The taxes the state collects help it educate 2 million children, provide health care to more than 2 million Georgians, manage and improve parks, investigate crimes and incarcerate criminals, and regulate insurance firms, utilities and dozens of professions. The state issues driver’s licenses and helps pay for nursing home care for the elderly.

The state is a major provider of treatment for mental health and drug addiction, and it helps fund public health programs that are fighting the COVID-19 pandemic. Besides paying salaries, it helps make sure that hundreds of thousands of former teachers, university staffers and state employees receive pensions and health care.

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 has so far proposed an income tax rebate to state taxpayers, similar to the one earlier this year, and a property tax break.

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.

Budget writers have noted that the higher prices for goods and services and the difficulty finding workers will drive up the cost of what the state has to spend as well, so Kemp will likely propose spending increases in the coming year.


How it could happen

Gov. Brian Kemp has the financial flexibility to help Georgians fight inflation because state tax collections have been on a roll for more than two years.

In the first four months of this fiscal year, collections were up 7.8%, or $744 million, over the record-breaking fiscal 2022 numbers.