The Brief
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Georgia’s reserves have climbed to $14.6 billion, including $9 billion in undesignated funds and $5.6 billion in the rainy day account.
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Economists warn that new tariffs and federal Medicaid cuts could affect whether taxpayers receive refunds this year.
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Lt. Gov. Burt Jones’ plan to eliminate the state income tax could wipe out the surplus in less than a year.
ATLANTA – Georgia is sitting on a massive cash cushion, with more than $14.6 billion now in state reserves, according to a new report from the State Accounting Office released this week.
Georgia’s budget surplus
What we know
That total includes about $9 billion in undesignated funds and $5.6 billion in the state’s rainy day account, giving lawmakers plenty to debate when they return to the Capitol in January.
The state’s surplus isn’t new. Last year’s total reached $16.5 billion, allowing lawmakers to cut income tax rates and send out more than $2 billion in refund checks to taxpayers.
It’s unclear whether similar refunds are possible this year. Economists say Georgia could soon feel the effects of new tariffs and must also make up for expected federal cuts to Medicaid.
Where should Georgia’s budget surplus go?
What they’re saying
“Business is booming. The economy’s actually very strong in the state of Georgia,” said Usha Rackliffe, a professor at Emory University’s Goizueta Business School. “It’s really excellent stewardship at the state level that we actually have. There’s this amazing problem to have, which is all this extra money.”
“In the prior times, you know, the government has given out checks of $250 if you single, $500 if you made filing joint,” Rackliffe said.
“You look at the general fund for the state of Georgia, which is roughly $33 billion or so, half of that is coming from individual income taxes,” Rackliffe said.
That’s why some analysts are warning against efforts by Republican lawmakers to eliminate the state income tax altogether. Lt. Gov. Burt Jones, who is running for governor, has pledged to pursue that goal, a move Rackliffe says could quickly drain the surplus.
“Just because you have a surplus doesn’t mean we should spend it all in one year,” she said. “I think we must still continue to be cautious and prudent.”
Democrats have urged using the extra funds to expand social services, while Rackliffe suggested long-term investments such as artificial intelligence, infrastructure, and bonuses for teachers.
“They’re not sexy, but they’re so essential. And when something goes wrong is when people feel it,” she said.
Kemp to outline spending in January
What’s next
Gov. Brian Kemp will outline his spending priorities when he proposes the next state budget in January.
The Source
FOX 5’s Rob DiRienzo spoke with Usha Rackliffe, a professor at Emory University’s Goizueta Business School, for this article. Additional details come from the Office of the Georgia Governor. Previous FOX 5 Atlanta reporting was also used.
