Georgia Reports $1.3 Billion Budget Surplus Amid Tax Cuts

ATLANTA, Georgia — The Peach State has concluded its fiscal year with a remarkable $1.3 billion surplus, as reported by the Governor’s Office of Planning and Budget. This marks at least the third consecutive year in the black, despite ongoing efforts by the Republican majority to lower the state’s income tax rate.

The surplus is the result of careful planning from Governor Brian Kemp’s administration, which adjusted revenue estimates to factor in the reduced tax rates. Additionally, Georgia’s surging salaries and substantial federal support during the pandemic have contributed to this positive financial position.

However, signs of an economic slowdown are emerging. The state has been utilizing its savings accounts to fund various one-time projects, opting for cash instead of borrowing. Yet, despite withdrawals, the state still managed to increase its reserves by year-end.

According to Danny Kanso, a senior fiscal analyst at the Georgia Budget and Policy Institute, the upcoming year may see a smaller surplus due to the $2.7 billion pulled from state reserves for various initiatives. Lawmakers approved this withdrawal while agreeing to return $1 billion to taxpayers through rebate checks.

Kanso noted that the state will maintain roughly $15 billion in reserves, a significant figure capable of covering several months of expenses in case of emergencies. This positions Georgia among states with considerable surplus balances compared to its neighbors.

Georgia’s tax collections reached $197 million higher than last year, indicating a 0.6% increase, despite last fiscal year’s suspension of the gas tax for two-and-a-half months. The revenue growth persists even with recent tax cuts.

“To continue to see that number grow in spite of those rate cuts is encouraging,” said Kyle Wingfield, president and CEO of the Georgia Public Policy Foundation. “I think it’s a good sign for a healthy economy.”