Many Georgia families next year could see $1,000 in tax rebates and reductions under a two-pronged proposal Gov. Brian Kemp released Thursday.
Kemp — facing a rematch with Democratic nominee Stacey Abrams this fall — said he wants to spend about $2 billion in state surplus money to provide a replay of the income tax rebates lawmakers approved in March and a resurrection of a more than 20-year-old property tax break that died during the Great Recession.
“I believe that isn’t the government’s money, it’s yours,” the Republican said. “And our job isn’t to spend it all just because we can.
“You elected us to fulfill the essential duties of government and return the rest to taxpayers.”
Both tax breaks would have to be approved by the 2023 General Assembly when it meets starting in January.
Kemp made the announcements at the Capitol flanked by Republican lawmakers only two days after his rival, Abrams, delivered her economic plan in a highly publicized address.
The lawmakers — including House Speaker David Ralston, R-Blue Ridge — said the policies of state leaders have helped build the surplus and make the tax breaks doable.
“Leadership matters, elections matter,” said state Sen. Burt Jones, R-Jackson, the GOP nominee for lieutenant governor.
They didn’t mention that massive federal COVID-19 pandemic aid has helped build the surplus. So has inflation, with higher prices and wages driving up income and sales tax collections.
Abrams, too, has said if elected, she will spend some of the fiscal 2022 surplus on a $1.1 billion income tax rebate. She also wants surplus funds to go toward raises for teachers and law enforcement officers and to help pay for an expansion of Medicaid, the health program for the poor and disabled, to cover more people.
The Democrat has urged Kemp to work with the Biden administration to get approval to use federal COVID relief funds for a tax rebate now, rather than waiting until next year.
“Georgians need relief today. Brian Kemp could work with the (Biden) administration to make that happen, but he doesn’t care,” said Alex Floyd, spokesman for Abrams. “Instead, Kemp’s copying Stacey Abrams’ tax rebate proposal but will force Georgians to wait for it until after an election.”
Kemp and the Department of Revenue announced last month that state tax collections ended fiscal 2022 on June 30 more than $6 billion ahead of last year.
The latest income tax refund Kemp and Abrams have proposed would work like this year’s.
Under this year’s House Bill 1302, eligible single Georgians received a $250 refund, joint filers $500. The refunds were approved for those who filed returns for the tax years 2020 and 2021.
It also said Georgians couldn’t get a bigger tax refund than what they paid in taxes.
Some seniors citizens later found out they wouldn’t get the tax refund because other state exemptions mean they didn’t owe state income taxes. However, more than 2.6 million refunds were sent out to eligible Georgians.
As was the case this year, the rebates, if approved by lawmakers, would likely go out in the spring.
The property tax break Kemp proposes would revive a program Democratic Gov. Roy Barnes started in the late 1990s that sent local property tax officials money to increase the exemption on properties. The tax break is only on the primary residence of the owner.
Kemp said, on average, homeowners would save $500 on their property taxes.
The increased homestead exemption was discontinued during the Great Recession because the state couldn’t afford it. Kemp’s proposal to revive it could be a one-year thing, since lawmakers would have to include money in future budgets to pay for it.
Earlier this year, Kemp also signed legislation to lower income tax rates.
As is mostly the case when lowering tax rates, the biggest beneficiaries will be top income earners. They will pay a smaller percentage on their higher earnings. But supporters say almost everyone will see something out of the tax cut.
Abrams hit on that disparity of benefits from the tax rate cut earlier this week.
“Too often when Georgia has faced crossroads, Republicans have used their power on behalf of the rich and the more powerful at the expense of the rest of us,” she said. “Tax cuts for the wealthy, instead of saving rural hospitals. Billions in incentives for big businesses, but scraps for the little guy.”
The surplus this year will likely be more than $5 billion, and Kemp’s tax cut plan would only spend $2 billion of that.
Some money is going into state reserves, and Kemp is using surplus funds to make up for the $150 million-$170 million a month the state is losing by not collecting its gas tax. Kemp has suspended collections in hopes of easing the impact of higher fuel costs.
The governor told reporters there will be discussions in coming months about what to do with the rest of the surplus money. With a reelection campaign to run, Kemp is certain to announce more proposals to spend at least some of the money before the November election.
“There are other things the General Assembly is going to weigh in on, there are other things we are looking at,” he said.
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