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Budget Week
Following Martin Luther King, Jr. Day, the Georgia General Assembly moved toward a scheduled return to the Gold Dome on Tuesday, January 21, 2025, to commence "budget week" – the second week of the legislative session for joint hearings by the House and Senate Appropriations committees, where the governor, state leaders, and agency experts present their budget recommendations to the joint committee. Incoming winter weather interrupted plans as Governor Brian Kemp declared a State of Emergency on Monday in anticipation of winter storms across the state, and the General Assembly rescheduled budget hearings. Despite the weather setback, Gov. Kemp released his official budget report to the joint committee, and legislators and staff continued working remotely to ensure the budget process remained timely and efficient.
Passing a balanced budget is our one constitutional obligation, and each year, budget week serves as the opportunity to lay the groundwork for the state's financial planning, covering both the remainder of the current fiscal year and the upcoming one. Gov. Kemp recently shared his official budget recommendations for the Amended Fiscal Year (AFY) 2025 and Fiscal Year (FY) 2026 budgets. To view Gov. Kemp's formal budget proposal recommendations, please click here, and I will discuss some highlights below.
In his budget proposals, Gov. Kemp made it clear that his top priority is providing relief for those affected by the devastation of Hurricane Helene. As such, the governor is proposing more than $614 million in the AFY 2025 budget to support recovery efforts across the state. This includes more than $600 million allocated to a range of recovery initiatives, such as $300 million for debris cleanup and road repairs, $100 million for agriculture and timber relief, $50 million to maintain the health of the state's property insurance risk pool for repairing state facilities and $150 million for FEMA-related expenses.
Gov. Kemp's proposals also highlight Georgia's recent economic performance, emphasizing the state's continued position as the number one state for business for 11 consecutive years. The governor credits this achievement to the state's fiscal management, which has allowed Georgia to return more than $7.6 billion in tax relief to citizens through property tax cuts, motor fuel tax reductions, and income tax rebates. The governor's budget proposals include a one-time tax rebate of $1 billion for the 2024 tax year and a phased income tax cut that would reduce the rate from 5.75 percent to 4.99 percent. In his report, the governor further proposes a subsequent reduction in tax rates to 5.19 percent by 2025, which would be expected to save taxpayers approximately $745 million annually. With these measures, Georgia taxpayers could benefit from more than $9.7 billion in cumulative savings since 2021.
In addition to tax relief, Gov. Kemp's budget proposals emphasize the importance of maintaining a robust Revenue Shortfall Reserve, which would allow the state to make certain one-time investments. As such, the governor's AFY 2025 budget proposal includes $2.7 billion in reserve funds, with a portion of those funds directed toward certain infrastructure projects. The governor also places a strong emphasis on supporting water and transportation infrastructure, as his proposals suggest $1.6 billion be set aside for development in these areas. This would include $743 million for capital construction and freight infrastructure through the Georgia Department of Transportation. The governor's budget proposals also suggest a boost in funding for local communities, recommending $1.1 billion to the AFY 2025 budget for economic development initiatives. This would include an extra $250 million for local road assistance grants, which would more than double the annual investment in local transportation. In addition, Gov. Kemp's budget proposals include $250 million in increased funding for the Georgia Environmental Finance Authority to support water infrastructure projects and $501.7 million for coastal water investments aimed at fostering long-term growth in Georgia's coastal communities. Following the devastation caused by Hurricane Helene, this funding would help rebuild water infrastructure and support economic projects along our state's resilient shores.
In line with his infrastructure priorities, Gov. Kemp's budget proposals recommend an additional $60 million for the Georgia Transportation Infrastructure Bank, which would provide low-interest loans and grants to support local transportation improvements. His budget proposals also call for an additional $48 million for the OneGeorgia Authority, which would continue support for rural workforce housing and site development programs. These initiatives have already facilitated 22 projects that could generate up to 1,607 new housing units.
Furthermore, the governor's budget proposals focus on meeting the evolving needs of Georgia's education system. His AFY 2025 and FY 2026 budget proposals include more than $1 billion combined in new investments across all levels of education, from Pre-K through higher education, which would fully fund Georgia's education sector. Specifically, Gov. Kemp's budget proposals include a request for more than $141 million in FY 2026 to fully fund the first year of Georgia's new Promise Scholarships, along with $174 million for the State Health Benefit Plan and $115 million for the Teachers Retirement System to cover the employer share of healthcare and retirement benefits.
Healthcare remains a top priority in the governor's budget recommendations. His FY 2026 proposal includes $324 million to support growth in Medicaid enrollment and utilization, with $36 million earmarked to cover pharmacy benefits for treatments such as gene therapies for sickle cell disease. Additionally, the governor's plan calls for $150 million to increase funding of medical schools, aiming to strengthen Georgia's healthcare workforce and advance medical research. By investing in our medical schools and healthcare institutions, we can enhance the quality of care for Georgians while building a stronger, more capable healthcare workforce.
Public safety and corrections are also priorities in Gov. Kemp's budget proposals, which address the challenges facing Georgia's correctional system in the wake of the pandemic, including rising healthcare and staffing costs. In response, the governor's budget proposals recommend a historic $603 million for the Georgia Department of Corrections to recruit and retain staff, improve facility security, and address inmates' physical and mental health needs. The governor's budget proposals also focus on state pensions, recommending an additional $725 million to further strengthen Georgia's retirement systems, building on progress made during the 2024 legislative session. This would include $500 million for the Employees' Retirement System to improve the funded ratio of the state's retirement funds.
In addition to receiving Gov. Kemp's formal budget recommendations this week, two Appropriations Subcommittees convened, and the Joint Appropriations Committee held a hearing on Thursday morning to discuss community development block grants. When we return to the State Capitol next week, several more House Appropriations Subcommittees are slated to meet and will begin reviewing their specific sections of the budget.
Full FY 25 Amended and FY 26 budgets documents here...
Bills from Week 1
No bills were voted on during Week 2 as committees met to begin moving legislation forward.
Committee Schedules
House Committees are beginning to meet, and once again, I serve on nine committees in addition to leading House Higher Education. Full committee schedules are available online by clicking here.
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