Georgia lawmakers gather amid tax and spending questions
ATLANTA — Georgia’s Capitol buzzed back to life Monday as the state’s 236 lawmakers gathered to kick off an election-year session that could be dominated by budget, education and gambling issues.
As lawmakers settled in, they took time to pay respects to two of their own who didn’t return for the start of the session. Rep. Jay Powell died in November after collapsing at a lawmaker retreat. Sen. Greg Kirk died in December after a battle with cancer. Both were honored with tributes from fellow members.
The state’s flagging revenues will likely take center stage during the first week, as Republican Gov. Brian Kemp sets an estimate of revenues and a proposal for spending in the 2021 budget year beginning July 1.
Crucially, lawmakers must decide if they’re going ahead with a previously announced plan to further cut Georgia’s top income tax rate to 5.5% from 5.75%. Revenues from income taxes have flagged since a 2019 cut from 6% to the current rate, and a fresh cut could cost state government $550 million in the next budget if lawmakers make it retroactive to Jan. 1 of this year. House Speaker David Ralston, a Blue Ridge Republican, announced support for going forward with the tax cut last week.
Kemp has also promised teachers a further $2,000 pay increase, after lawmakers provided a $3,000 raise last year at his behest. Expectations among teacher groups for a raise this year have clearly fallen, given the tight budget outlook. But the governor hasn’t said whether he wants to go forward with the tax cuts and pay raise this year. Kemp is likely to clear up those questions when he gives his State of the State speech and releases his budget proposal on Thursday.
Figures released Monday show Georgia tax collections improved somewhat in December, putting revenues $32 million ahead of where they were last year after the first half of the state’s budget year. However, the state originally projected to spend $800 million more in the current budget year than the one that ended June 30, meaning Georgia remains far behind projected revenue levels of $27.5 billion.
Kemp has ordered midyear budget cuts which will at least partially close that gap. Individual income taxes and vehicle taxes continue to lag last year’s collections after six months.