Today, Gov. Kemp released his executive budget proposals for the Amended Fiscal Year (AFY) 2026 and the full Fiscal Year (FY) 2027, along with revised revenue estimates that will set the initial boundaries for the appropriations process. These executive budget proposals mark the starting point for the General Assembly’s budget process, which will begin next week with joint hearings from Tuesday to Thursday. GBPI will host its annual Insights conference on Friday, January 23, offering in-depth analysis on the full state budget and where Georgia stands going into the 2026 legislative session.
Under Gov. Kemp’s $38.5 billion spending plan for FY 2027, Georgia would allocate $738 million, or 2%, more than it is currently spending, while also freeing up $573 million in funding by shifting back to issuing bonds to pay for long-term capital projects. For the current fiscal year, the governor recommends increasing spending from $37.8 billion to $42.3 billion, an increase of $4.5 billion. This includes releasing $3.3 billion from the state’s surplus reserves. Gov. Kemp also called on the General Assembly to enact legislation to issue a non-refundable rebate of $250 for single filers and $500 for married couples, which would reduce surplus funds by about $1 billion. If Gov. Kemp’s full proposal is enacted, Georgia’s Revenue Shortfall Reserve (RSR) would remain full and the state would still hold more than $5 billion in undesignated surplus funds.
“We commend the strides made in Gov. Kemp’s executive budget to respond to urgent needs facing Georgia as federal cost shifts threaten the SNAP program that helps families put food on the table and as Georgians across our state struggle to afford the costs of higher education,” said Staci Fox, President and CEO of GBPI. “At the same time, this budget eliminates funding for an ‘opportunity weight’ to support students living in poverty and leans on one-time pay supplements instead of permanent salary enhancements to strengthen Georgia’s workforce of educators and other vital employees. The General Assembly should build on the governor’s proposals, while heeding his warning that state and local governments must continue to raise sufficient resources to deliver on the commitments our leaders have made to Georgia families.”
Major highlights of the Governor’s Budget Report for AFY 2026 and FY 2027 include:
- New estimates for the state’s balance of cash on hand and projected revenues. Georgia’s General Fund reserves currently total $14.9 billion, with $5.6 billion in Georgia’s RSR and $9.3 billion undesignated. Georgia’s Lottery for Education also holds another $2.5 billion in reserves.
- Kemp’s revenue estimate anticipates a reduction in personal and corporate income tax revenues as a result of pending legislation to reduce Georgia’s flat personal and corporate income tax rate down from 5.19% to 4.99%. GBPI estimates that the change would reduce state revenues by $788 million per year, with 73% ($568 million) of tax cuts going to those in the top 20% making above $159,000 per year.
- Cash spending for long-term infrastructure projects is increased from $716 in the current FY 2026 budget to $1.3 billion in AFY 2026. Since FY 2024, Georgia has departed from its decades-long practice of financing long-term capital projects with bonds and instead allocated general funds for this purpose. However, this practice is discontinued in FY 2027, when the state would resume issuing bonds to finance $654 million in projects.
- $611 million added for a one-time $2,000 pay supplement for state employees, Regents employees and certified PreK-12 educators and administrative staff.
- $325 million added in initial funding for the state’s DREAMS Scholarship Program, which is intended to create a new system of need-based aid for higher education. The funds are split between $300 million for an endowment and $25 million in scholarship funds.
- $46.4 million added to fully fund SNAP administration and adjust the state’s share of administrative expenses from 50% to 75% in FY 2027, along with $18.2 million for efforts to reduce SNAP’s payment error rate ($6.2 million for upgrades to the Gateway online eligibility system in AFY 2026 and $12 million in FY 2027).
- $41.2 million added in AFY 2026 and $26.5 million in FY 2027 for foster care and child welfare.
- $38.5 million added to increase pupil transportation funding for public schools in FY 2027, an increase of 11%.
- $15.3 million eliminated for FY 2027, which previously funded a one-time pilot for an “opportunity weight” designed to increase support for students in poverty.
