Kemp to state agencies: No spending increases
(The Center Square) – Georgia Gov. Brian Kemp has instructed state agencies to maintain current spending levels over the next two years.
State agencies must submit their budget requests ahead of the January legislative session, when lawmakers will review the current fiscal year spending plan and construct a budget for next year.
Two budgets are passed through the General Assembly every legislative session. Lawmakers must review and approve spending for the remainder of the current fiscal year, also known as the Amended Fiscal Year (AFY) budget, and approve the budget for the next fiscal year, which begins July 1.
Kelly Farr, Kemp’s budget director, has told agency leaders not to increase spending in their amended fiscal year 2022 and fiscal year 2023 budget requests.
“While we continue to be optimistic about the strong fiscal foundation of our state looking ahead, we should not take our foot off the gas in finding better and more efficient ways to run state government,” Farr wrote last week in a letter to agency leaders.
The $27.2 billion spending plan for July 1 through June 30, 2022, gradually replaced more than $2 billion that was cut from the budget at the onset of the COVID-19 pandemic. Kemp had instructed agencies to reduce spending by 10% in 2020.
“The last two fiscal years have brought exceptional challenges to our state and to each of your agencies,” Farr wrote. “Our state agencies have been on the frontlines combatting the COVID-19 pandemic all while finding ways to continue to provide vital services to our citizens in an uncertain fiscal climate.”
Agencies must submit their budget requests by Sept. 1.
The directive comes as state legislative leaders have vowed to spend more money to combat crime and support mental health services. House Speaker David Ralston, R-Blue Ridge, announced a plan last month to spend $75 million on additional personnel and resources for law enforcement and mental health services. Lt. Gov. Geoff Duncan said creating a $250 million tax credit for law enforcement donations was the “cornerstone” of his legislative agenda in 2022.
Georgia’s economy is operating at 95% of where it was at the onset of the pandemic, according to Moody’s Analytics and CNN Business’ Back-to-Normal Index.
For fiscal year 2021, which ended on June 30, net tax collections were nearly $27 billion, a 13% year-over-year increase. Net tax revenue in Georgia was $2.5 billion in June, representing a $563 million increase – or 29.1% – compared with June 2020, Kemp’s office said.
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