ATLANTA (AP) - Georgia’s governor isn’t seeking another income tax cut in the upcoming budget, but he’s still not talking about it.
Republican Gov. Brian Kemp, speaking to lawmakers Tuesday about his proposed budget, focused on efforts to cut spending without harming state services as well as his spending priorities - including $376 million for additional $2,000 raises for K-12 and preschool teachers.
“Even in this positive economic climate, to fully support our students and teachers and care for our most vulnerable Georgians and strengthen our economic development efforts, we must prioritize our existing financial resources,” Kemp said. “It means reducing costs to government while continuing to deliver excellent service for our citizens.”
Kemp left the speech without taking questions from reporters and his office didn’t immediately respond to an Associated Press inquiry about why his spending proposal doesn’t include a plan to cut the state’s top income tax rate from 5.75% to 5.5%, which had been envisioned when lawmakers cut the top rate from 6% in 2019.
But state economist Jeffrey Dorfman told a joint House-Senate budget committee hearing that Kemp’s budget omits the additional cut. Dorfman told lawmakers that changes in income taxes had been meant to avoid a state windfall because of changes in federal tax law but appear to have overshot the mark.
“We did a good job of giving the windfall back to taxpayers,” Dorfman said. “It turned out we did a little better job than we thought we were doing.”
Dorfman said another tax cut would cost $500 million; other estimates put it at $550 million.
Kemp is seeking midyear budget cuts this year and further cuts next year because of a slowdown in state revenue. Tax receipts were barely above last year through December, although Kemp projected growth of more than $800 million through June 30. Growth from income tax receipts tanked after the tax cut, and sales tax growth also slowed.
Kemp projects revenue will pick up for the remainder of this budget year, eventually rising by $410 million. Next year, he projects growth of $726 million or 2.7% percent, below growth rates in recent years.
“I believe Georgia’s economy is likely to continue growing slowly over the next nine to 12 months, which means we’ll have some additional revenue but not as much additional revenue as we’re used to having,” Dorfman said.
Kemp wants to give K-12 schools, colleges, universities and Medicaid enough money to pay for population growth and other cost increases. Most other agencies would see cuts. Kemp focused on efficiencies, cited as an example a new timekeeping system that would save $16 million in overtime for prison employees.
“The budget before you shows that reducing costs doesn’t require drastic cuts to other agency activities,” the governor said.
But agency directors who spoke after Kemp on Tuesday told lawmakers that cuts would curtail services.
Agriculture Commissioner Gary Black was the most blunt. A Republican elected statewide, Black isn’t appointed by Kemp and told lawmakers the budget presents “challenges.” He said his department has eliminated 18 full-time and seven part-time vacancies, plus laid off six regular and four contract employees. Black said that, with fewer employees, his department will conduct fewer food safety, animal, gas pump and scale inspections.
“This is uncomfortable information,” Black said. “It is of no comfort to me to present it, but it is truthful and accurate.”
Labor Commissioner Mark Butler told lawmakers that he particularly opposed Kemp’s proposal to eliminate funding for Jobs for Georgia’s Graduates, a training and education program targeting at-risk high school students.
“I will fight from here until you kick me out of office to have any cuts to the program,” Butler said.
Economic Development Commisioner Pat Wilson said his department would reduce travel and trade show visits to market Georgia. He said project managers are busy now with inquiries about businesses that want to expand in Georgia but said that “in the future, there will be an impact.” The department also will reduce funding for items including locally run visitor centers and historic markers.
State Rep. Al Williams, a Democrat from Midway, likened the position of some Kemp appointees on cuts to taking castor oil and pretending to like it.
“It always amazes me how people come up and paint this rosy picture of cuts,” Williams said.
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