Georgia Budget: $2 Billion in Tax Relief and Key Investments for 2026

Georgia lawmakers have approved a mid-year budget amendment for the 2026 fiscal year, delivering approximately $2 billion in tax relief to residents and allocating funds to critical areas like education, mental health, and infrastructure. The amended budget, now awaiting Governor Brian Kemp’s signature, increases the total state spending plan to nearly $43.7 billion, up from the initial $42.3 billion.

Tax Relief Measures

The cornerstone of the amended budget is a substantial tax relief package. This includes $1.2 billion in income tax rebates, providing $250 for single filers and $500 for married couples filing jointly. $850 million is allocated to the Homeowner Tax Relief Grant program, expected to save homeowners around $500 on their property taxes in 2026. Lawmakers too passed House Bill 1001, reducing the state income tax rate from 5.19% to 4.99%.

Investments in Education and Public Employees

The budget prioritizes investments in Georgia’s education system and its workforce. $366 million has been earmarked for one-time bonuses for public school employees, including teachers, administrators, custodians, nutrition workers, school nurses, and bus drivers, with each receiving a $2,000 bonus. The Georgia Department of Early Care and Learning will also receive $17.2 million to provide $2,000 bonuses to its teachers and assistant teachers.

Addressing Critical State Needs

Beyond tax relief and education, the amended budget addresses several key state needs:

• Mental Health: $409 million is allocated to construct a regional hospital for the mentally ill, aiming to alleviate the burden on local jails often used to house individuals with mental health issues.
• Prison Capacity: $150 million will be used to expand prison bed capacity.
• Infrastructure: $1.68 billion is dedicated to new express lanes on I-75 south of Atlanta, slightly less than the initially requested $1.8 billion. $185 million will fund interchanges on State Route 316 connecting Athens to the Atlanta metropolitan area.
• Local Infrastructure: Cities and counties will receive $250 million in grants for road maintenance and improvements, and the state will invest $100 million in repairing and replacing rural bridges, prioritizing those crucial for agribusiness and timber industries.
• Homelessness: $50 million in community grants will address homelessness, with $5 million specifically designated for homeless veterans.
• Scholarships: The budget restores $325 million for the Georgia DREAMS scholarship program, funded in part by $145 million from state lottery surplus funds.

Budget Process and Approval

The amended fiscal year budget for 2026, formalized in House Bill 973, passed the House 169-2 and received unanimous approval in the Senate. The compromise was reached after initial disagreements between the House and Senate regarding funding priorities, with Governor Kemp ultimately contributing an additional $1.4 billion in surplus funds to bridge the gap.

Lawmakers will now commence crafting the full budget for fiscal year 2027, which will dictate state spending starting July 1.

Source: Capitol Beat News Service