Gov. Brian Kemp is proposing almost $3 billion more in spending from state revenue in the 2023 budget year that begins July 1, led by more than $1 billion in pay and retirement increases for Georgia’s state, K-12 and university employees.
That includes $2,000 for teachers and $5,000 for university and state agency employees. Kemp wants to give those amounts as one-time payments this year, and then as permanent pay raises next year.
Kemp wants to spend $30.2 billion in state revenue in the 2023 budget, up from the $27.3 billion originally agreed on this year.
The one-time payments, including a one-time $1.6 billion state income tax rebate, would actually drive state spending higher in the current year, to nearly $31.5 billion.
The Republican governor is paying for the measures thanks to the gusher of tax revenue that poured into state coffers in the 2021 budget year, when the state ran a $3.7 billion surplus, filling its rainy day fund to the legal limit and leaving $2.3 billion in additional “undesignated” surplus.
The income tax rebate, including $250 for single filers, $375 for single adults who head a household with dependents and $500 for married couples filing jointly, would be paid from the undesignated surplus. But Kemp’s revenue estimate, which sets the legal ceiling for how much lawmakers can spend, makes no mention of the other $700 million in undesignated surplus.
Such a spending spree would allow Kemp to fulfill promises he made in 2018 when he ran for governor and court other voters with cash. The budget frontloads much of that cash, so that voters might receive benefits even before the May 24 Republican primary, when Kemp is being challenged by former U.S. Sen. David Perdue, former state lawmaker Vernon Jones and others.
The budget includes the first details of what Georgia will give Rivian Automotive, the electric vehicle maker which in December announced a $5 billion, 7,500-job plant near Social Circle. The state would give a local development authority $112.6 million to buy and develop land for the complex. The Technical College System of Georgia would spend $11.6 million to build a training center and develop training programs for the electric vehicle industry.
Kemp also wants to spend $600 million over the next 18 months to buy a prison and build a new 3,000-bed prison for medium- and high-security prisoners. Kemp wrote in his budget letter that the new prisons would let the state “close four of our older and most dangerous facilities, saving the state operational costs in the future while providing safer environments for our correctional officers.”
Fully restoring the state’s K-12 funding formula and delivering the remaining $2,000 of the $5,000 raise that Kemp promised teachers would cost more $650 million this year and next. Kemp would also deliver one-time bonuses of $2,000 to full-time non teachers in the current year and $1,000 one-time bonuses to part-time non-teachers, including bus drivers and cafeteria workers.
There’s also nearly $500 million in new Medicaid spending in the 2023 budget, including money for new beneficiaries, to increase payments to providers, to enroll children now eligible for food stamps or welfare in an “express lane” for health insurance and to extend coverage for mothers after birth from 6 months to 12 months.
There’s also $125 million in new spending for state subsidies to decrease the premiums people pay for individual health insurance. Kemp also proposes $15.5 million to move ahead with his plan to create a separate state-run health insurance marketplace, even though President Joe Biden’s administration has questioned his plans.
Kemp also proposed borrowing $850 million, including $470 million for construction at K-12 schools, university and technical colleges. The state would borrow another $80 million for the convention center being built in Savannah. Kemp also wants to spend $45 million to move employees out of the 41-story 2 Peachtree tower in downtown Atlanta and borrow $31 million to renovate the now-empty former Judicial Building near the state Capitol.