ATLANTA – With tax relief, disaster assistance, infrastructure investments and prison upgrades on his agenda, Gov. Brian Kemp on Thursday proposed major budget increases, particularly in the spending plan covering the rest of this fiscal year.
Kemp’s $40.5 billion fiscal 2025 mid-year budget, $4.4 billion above the spending plan the General Assembly adopted last spring, dips into the state’s healthy surplus to bankroll a $1 billion one-time tax rebate, $615 million storm recovery package for victims of Hurricane Helene, and $1.7 billion for transportation and water projects.
A $603 million allocation for improvements to Georgia’s prison system is spread out over both the mid-year budget and the governor’s more modest $37.7 billion fiscal 2026 spending plan. The 2026 budget, which takes effect July 1, also includes most of the funding for a $1 billion rollback of the state’s income tax rate from 5.39% to 5.19%.
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“At the end of the day, that’s your money – not the government’s,” Kemp said Thursday during his annual State of the State address to a joint session of the Georgia House and Senate. “We believe you should keep more of it.”
Kemp first responded to Hurricane Helene by repurposing $100 million to the Georgia Development Authority last November to provide direct financial support for farmers and timber producers who suffered losses from the massive storm.
The $615 million relief package the governor requested Thursday includes $200 million to cover cleanup costs already incurred by the Georgia Department of Transportation, $150 million to help both the state and local governments match federal disaster assistance, $100 million to the Georgia State Financing and Investment Commission to offset the agency’s disaster relief costs, $50 million to the state Department of Administrative Services to cover storm-related damage to state properties, and $15.7 million for the Georgia Forestry Commission.
The $1.7 billion infrastructure package includes $530 million for the DOT for highway projects critical to statewide economic development and $250 million in grants to local governments for road projects.
Another $502 million would be used to build surface water-supply projects in Coastal Georgia as an alternative to dipping into environmentally fragile groundwater to supply the huge Hyundai electric-vehicle manufacturing plant now under construction west of Savannah. A new water intake on the Savannah River is expected to deliver 20 million gallons a day by 2030.
Another $250 million would go to support water and sewer projects across the state through low-interest loans to local communities.
The prison package follows release of a Justice Department audit last fall that accused the Georgia prison system of violating inmates’ constitutional rights by failing to protect them from widespread violence. It includes 4% pay raises for correctional officers, 8% increases for mental health professionals working in state prisons, and funds to hire an additional 330 guards.
Another $371.7 million in the mid-year budget and $68.2 million in the fiscal 2026 spending plan would go toward infrastructure upgrades, while $97 million would be used to improve inmate health care.
The two budgets also fully fund Georgia’s Quality Basic Education (QBE) formula for students in grades K-12, something the state has only been able to do in recent years after building up a $16 billion surplus.
The new private-school vouchers program will be funded in fiscal 2026 for the first time at $141 million, equivalent to 1% of the QBE, a limit set by legislation the Republican-controlled General Assembly passed last year establishing the program.
For the second year in a row, the state can afford to fund building projects with cash rather than borrowing. The $1.5 billion capital projects budget would be split between this year and next.
The House and Senate Appropriations committees will conduct three days of joint hearings on the spending proposals next week.
