Georgia Gov. Brian Kemp on Friday proposed for lawmakers to increase the annual wages of teachers and state agency employees.
He suggested providing teachers with an additional $2,000 to meet their goal of increasing to $5,000 over four years. He also proposed raising wages for state agency employees by $5,000.
This increase will be possible as Georgia’s revenue reached more than $1 billion in November, which was more than the $27.3 billion budgeted for it.
The teacher increase is expected to cost the state $461 million. In all, the state is expected to spend $49.9 billion in the budget year beginning July 1.
However, according to House Appropriations Committee Chairman Terry England, increasing teachers’ pay this year could prove complicated as school districts pay some staff from local funds. Typically, school officials want to tally state-provided increases to those paid for from local funds.
In Friday’s letter to state agency leaders, Kemp proposed increases in wages for full-time, benefit-eligible state employees. He said agency leaders had often suggested that raising wages would help reduce employee turnover. He said that under his scheme, state employees can see a salary hike till April 1.
“I am confident that these strategic investments in our state government employees will enhance our ability to serve the hardworking Georgians,” Kemp wrote.
It would cost $383 million to bring the state’s K-12 funding formula into the full amount it says the state should provide for schools. The state could also reinstate austerity cuts to universities.
“One thing I am quite sure of is that the austerity budget will be reinstated,” said England.
England said the plan to improve mental health is likely to cost an additional $75 million and the senator wants to spend more on foster care. But other state agencies cannot compensate for the cuts made at the start of the pandemic in 2021.
Democrats want to fully expand Medicaid, but Republicans still oppose it. Lawmakers budget for a small Medicaid expansion proposed by Kemp, but It has been blocked by federal authorities And it is not clear what will happen to the amount set aside for this.
Blake Tillery, a Vidalia Republican, of England and the chairman of the Senate Appropriations Committee, both said the state may need to raise wages for non-education workers because of inflation and competition for labor. Lt. Gov. Geoff Duncan is calling for a pay increase for prison workers. Tillery said a general wage increase could be considered on top of the additional increase for areas with shortage of staff. But Ralston cautioned that there may not be enough money for everyone.
“I’m trying to count how many groups were promising pay increases. The list gets longer every day,” Ralston said. “And I know we’re in a pretty good budget position, but at some point, you know, we’re going to run out before we can reach everyone.”
Tax cuts are likely to focus on income tax. Senate President Pro Tame Butch Miller, a Gainesville Republican running for lieutenant governor, has joined primary rival Sen. Butch Jones, a Jackson Republican, in a proposal to end the state’s income tax.
House Speaker David Ralston is dismissing that plan, saying the state cannot sacrifice nearly half of its revenue.
“It’s become one of those things that looks good on a bumper sticker or a soundbite or maybe even a campaign ad,” Ralston told reporters on Thursday. “But we have to govern; we have to make decisions. I think doing it in an incremental way is a more desirable way of doing it.”
Georgia’s top income tax rate remains at 5.75%. Before the pandemic, House Republicans wanted to cut that rate by a quarter point to 5.5%, which was estimated to cost more than $500 million. Other approaches may include further increasing the standard deduction that one can earn before starting paying taxes, making Georgia income tax a flat rate, or a combination of all three. Last year, MPs increased the standard deduction, $140 million tax deduction,
MPs can also be called Decide how to spend the $2.2 billion surplus Which was created even after filling the state’s Rainy Day Fund to the legal limit of $4.3 billion. England said the state could choose to pay for some capital improvement projects directly rather than borrowing through bonds.
The Associated Press contributed to this report.