State Fiscal Briefs

February 2021

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Georgia’s budget basics

According to the National Association of State Budget Officers (NASBO), Georgia’s total expenditures in fiscal year (FY) 2020 were $53.5 billion, including general funds, other state funds, bonds, and federal funds. NASBO reported that total expenditures across all states in FY 2020 were $2.3 trillion, ranging from $4.7 billion in Wyoming to $337.7 billion in California.

Each state allocates spending and taxes differently among different levels of governments, and local governments often administer programs with state funds, so combined state and local government data show a more complete picture of individual benefits and contributions when comparing states.

Per the US Census Bureau, Georgia’s combined state and local direct general expenditures were $71.6 billion in FY 2017 (the most recent year census data were available), or $6,872 per capita. (Census data exclude “business-like” activities such as utilities and transfers between state and local governments.) National per capita direct general expenditures were $9,446.

Georgia’s largest spending areas per capita were elementary and secondary education ($1,908) and public welfare ($1,168). The Census Bureau includes most Medicaid spending in public welfare but also allocates some of it to public hospitals. Per capita spending is useful for state comparisons but is an incomplete metric because it doesn’t provide any information about a state’s demographics, policy decisions, administrative procedures, or residents’ choices.

Georgia’s combined state and local general revenues were $72.7 billion in FY 2017, or $6,985 per capita. National per capita general revenues were $9,592. Georgia uses all major state and local taxes. After federal transfers, Georgia’s largest sources of per capita revenue were charges ($1,250), such as state university tuition and highway tolls, and property taxes ($1,161).

Georgia’s politics

Governor Brian Kemp, a Republican, was elected in 2018 with 50 percent of the vote. The next gubernatorial election is in 2022.

Republicans control both the House of Representatives (103 Republicans to 77 Democrats) and Senate (34 Republicans to 22 Democrats). Control of the governor’s mansion and each house of the legislature gives Republicans a trifecta in Georgia. The entire legislature is up for election in 2022 because both representatives and senators serve two-year terms.

Georgia’s budget institutions, rules, and constraints

Georgia uses an annual budget. The legislature must pass a balanced budget, but it can carry a deficit over into the following year. Georgia does not have any other tax and expenditure limits. However, there are limits on total authorized debt and debt service incurred by the state.

(Note: Some states have informal budget institutions that constrain overall spending growth or a specific expenditure’s growth.)

Georgia’s recent fiscal debates

  • In 2018, Georgia enacted a significant tax cut, in part to offset revenue increases caused by the Tax Cuts and Jobs Act’s broadening of the tax base, and effects on the state’s tax code. The cut (HB 918) lowered the top individual income tax rate from 6 percent to 5.75 percent (the state’s tax is relatively flat, with top rates on taxable income above $7,000 for single filers and $10,000 for married couples), doubled the standard deduction for all filers (e.g., from $3,000 to $6,000 for married filers), and lowered the corporate income tax rate from 6 percent to 5.75 percent.
  • Georgia is one of 14 states that have not accepted funds for expanding Medicaid eligibility created by the Affordable Care Act. The Urban Institute estimates that if Georgia had accepted Medicaid expansion, it would have received 28 percent more federal Medicaid funds ($3 billion) and increased its state spending on Medicaid 6.8 percent ($246 million). Urban estimates that savings from Medicaid expansion (e.g., lower spending on uncompensated care) would, like with other states, fully or largely offset Georgia’s additional direct state spending increases. Governor Kemp is attempting to secure waivers from the federal government for a limited Medicaid expansion.
  • In August 2019, after the state enacted its FY 2020 budget, Governor Kemp requested budget cuts from most state agencies, though K–12 education, state universities, and Medicaid were exempted. The governor asked each agency to submit budget-reduction proposals that produce a 4 percent cut in FY 2020 spending and a 6 percent cut for FY 2021 spending. As a result, hundreds of state jobs are likely to be eliminated. This is the first request for budget cuts in Georgia since the immediate aftermath of the Great Recession.

Georgia’s current budget

Governor Kemp released his FY 2021 budget proposal in January 2020. The proposed budget included $24.1 billion in general fund spending, an increase of 2 percent over FY 2020 spending, and $54.2 billion in total spending. The proposed budget prioritized a teacher pay raise and public safety investments.

Georgia enacted its FY 2021 budget in June 2020. The enacted budget, passed after revised revenue forecasts significantly lowered revenue estimated, included $22.1 billion in general funds spending ($2 billion, or 8 percent less than the governor originally proposed) and $52.5 billion in total spending. The budget included $250 million from the state’s reserve funds to offset revenue losses.

Governor Kemp released his FY 2022 budget proposal and gave his State of the State address in January 2021. In his speech, the governor admitted he made “difficult choices” to balance the previous fiscal year’s budget, but announced his FY 2022 budget would not include additional spending cuts, layoffs, or furloughs. The governor also said he would not propose any tax increases. Governor Kemp’s budget plan includes $23.3 billion in general fund spending and $54.0 billion in total spending; both totals are above FY 2021’s enacted spending but lower than what the governor had proposed for the fiscal year before the pandemic.

For more on Georgia’s budget, see