Kemp orders state agencies to hold spending steady amid tax cuts

Gov. Brian Kemp is directing state agencies to keep their spending at stable levels as Kemp prepares to leave office and as the state reduces income taxes.

A memo was sent in July instructing agencies to maintain their current spending levels. Richard Dunn, the director of the Georgia Office of Planning and Budget, sent the memo saying the move was necessary to ensure development in the state continues while also accommodating for the recent reduction in the state’s income tax.

“To sustain these achievements while implementing historic tax relief for our citizens, responsible fiscal management principles require that we continue to live within our means,” the memo reads.

Republican state Sen. Blake Tillery, chairman of the Georgia Senate Appropriations Committee and a large supporter of eliminating the state income tax, told Atlanta News First that the state is coming down from a pandemic-era high.

“All that sugar high has finally bled out of the system, and you’re seeing a return to normal on state revenues,” he said.

Democrat state Sen. Reshaun Kemp told Atlanta News First that freezing the budget impacts education and health care the most.

“While we continue to see hospitals close and students that are languishing in their education, we should not be cutting or freezing spending,” he said.

Kemp signed the Georgia Economic Growth and Tax Relief Act in May to reduce Georgia’s state income tax from 5.19% to 4.99%. The law allows for an annual reduction of 0.125% until the rate reaches 3.99% as well as increased the standard deduction for single and married filers.

To offset the cost of the decrease and the recent suspension of the gas tax, Kemp cut $300 million from the state’s $36.6 billion budget, including from agencies like the Department of Community Health and the Department of Behavioral Health and Developmental Disabilities.

Dunn wrote that agencies should prepare for additional cuts by making contingency plans for the worst-case scenario.