Kemp signs midyear budget with an almost $1 billion property tax break

Credit: Arvin Temkar/AJC

Credit: Arvin Temkar/AJC

Gov. Brian Kemp has signed a midyear spending plan that includes a property tax cut of nearly $1 billion and repays the Georgia Department of Transportation $1.1 billion it lost last year when the state suspended the motor fuel tax to stem the impact of high gas prices.

Fuel taxes pay for road projects, and the money will go toward keeping GDOT programs rolling.

The House and Senate last week passed the $32.5 billion midyear budget, which runs through June 30. Kemp said he signed the budget Friday, but he announced it Monday.

The Georgia Senate is expected to give final approval Tuesday to a separate $1 billion income tax rebate that Kemp has proposed.

“We’re giving money back to the people through our budget because they know best how to use it,” Kemp said at a Capitol press event Monday while surrounded by more than two dozen lawmakers, including House Speaker Jon Burns, and Lt. Gov. Burt Jones.

The midyear budget builds on consecutive years of massive tax surpluses the state has seen since the COVID-19 economic shutdown ended in the spring of 2020. It will increase spending by about $2.36 billion or 7.8%.

Under the spending plan, homeowners will receive an extra one-time exemption on the value of their homes at tax time, a move that Kemp said in January would save those Georgians, on average, about $500. It will cost the state about $950 million.

Under the separate bill the Senate is expected to approve, many Georgians would also receive an income tax rebate, as they did last year. Married couples who file jointly would receive a maximum of $500. Someone who files as head of a household would get up to $375, and single filers could get as much as $250 for single filers.

People who don’t owe state income taxes — such as seniors living on pensions and/or Social Security — won’t receive that rebate.

The midyear budget includes $50,000 safety grants in each school, funding to help students who may have fallen behind academically during the COVID-19 pandemic, and more money in dozens of other areas, such as health care, rural workforce housing development, prisons and public safety.

Legislators also added funding to give 54,000 state government pensioners one-time bonuses of $500. State government pensioners got their first cost-of-living increase in more than a decade last year, although lawmakers have offered bonus checks some years.

The midyear budget includes $166.7 million to help fund large economic development projects in the state, including new Rivian and Hyundai electric-vehicle plants.

The state isn’t spending all its leftover tax revenue from last year, and it is expecting another surplus when this fiscal year ends June 30.

When asked what the state would do with the billions of dollars in surplus, Kemp said, “The one thing I can assure you we are not going to do, we are not going to grow government.”

Four years ago, before the pandemic, the midyear budget was $26.9 billion, about 20% less than the budget Kemp signed into law.

The governor said he would talk with legislators about their priorities. He also noted the economic outlook is iffy. He said people will need more state services if unemployment rises and the economy sours.

The state currently has more than $5 billion in its rainy day fund, a record amount.

Tax rebates

$500 — The average savings to homeowners through a one-time exemption on the value of their homes that’s part of the midyear budget Gov. Brian Kemp signed.

$500 — The maximum amount married couples who file jointly would receive under an income tax rebate that the Senate is expected to approve. Somebody who files as head of a household could get up to $375. Single filers could get as much as $250.

However, people who don’t owe state income taxes — such as seniors living on pensions and/or Social Security — would not get that rebate.