Kemp Cuts $300M from Budget After Tax Bill Creates Revenue Shortfall
Gov. Brian Kemp slashed $300 million in spending after signing a tax cut that created a $1.3 billion budget shortfall.
ATLANTA, GEORGIA — Governor Brian Kemp signed an income tax cut bill into law Monday, resulting in a $1.3 billion revenue shortfall for next year’s budget. This prompted the term-limited governor to announce $300 million in spending cuts Tuesday.
The tax reduction measure exceeds what Kemp had initially budgeted for his final year in office. While the governor had planned for a cut to lower Georgia’s income tax rate from 5.19% to 4.99%, fulfilling his campaign promise to bring the rate below 5%, lawmakers sent him a more aggressive reduction in the final hours of this year’s legislative session.
“I strongly support cutting taxes and giving hard-working Georgians more relief, which is exactly what we accomplished this legislative session,” Kemp said. “But our job is to deliver on that relief while at the same time protecting the future fiscal standing of our state.”
Budget Cuts Target New Spending Programs
The governor’s cuts targeted new spending initiatives to help cover the resulting deficit from the tax reduction. The budget changes take effect in July when the new fiscal year begins.
While some new spending survived the cuts, including funding for a literacy initiative, many other areas faced reductions. The cuts eliminated $9.3 million for services for people with disabilities and $30.7 million for transportation funding for schools.
Governor Defends Difficult Decision
Kemp defended his decision to sign the tax cut bill despite the financial challenges it created for the state budget. The governor acknowledged that lawmakers put him in a difficult position with the legislation.
According to the Georgia Recorder, Kemp said lawmakers knew the tax cut “put us in a tough position to either veto the tax cut and pay for all this stuff, or either to sign the tax cut and not be able to pay for it.”
The governor, who cannot seek reelection due to term limits, framed the decision as balancing tax relief for Georgia residents with maintaining the state’s fiscal responsibility. The budget adjustments represent his administration’s effort to manage the revenue gap created by the more extensive tax cuts approved by the legislature.
