(The Center Square) — The head of Georgia’s budget agency is asking state agencies to keep their budgets flat for the upcoming budget process.
Although Georgia continues to see higher net tax collections, state officials are worried that rising inflation could hurt the state’s cash flow.
For fiscal 2023, Gov. Brian Kemp, a Republican, signed a $30.2 billion spending plan into law. The budget increased spending by more than 10% over the previous year’s budget.
“Rising costs are impacting critical state services just as they are impacting Georgia families,” Kelly Farr, director of the state’s Office of Planning and Budget, said in a memo last week to agency heads.
“Though Georgia’s economy and state revenues remain strong, inflationary pressures will be a significant driver in the upcoming budget cycle,” Farr added. “Therefore, agencies are instructed to submit operational budgets equivalent to their current FY 2023 appropriation for Amended FY 2023 and FY 2024.”
Agencies must submit their budgets by Sept. 7. The state also encouraged agencies to use technology to streamline their operations.
“Agencies who have identified ways to leverage technology to improve business processes or found other budgetary efficiencies may request to redirect resources within their existing budgets to use for new initiatives or to further improve their service delivery model,” Farr wrote. “Any requested redirections must net to zero to be submitted.”
Georgia’s buoyant economy has impacted this year’s governor’s race, and both Kemp and his Democratic challenger, Stacey Abrams, have rolled out proposals to use Georgia’s “budget surplus.”
Kemp has proposed giving Georgia taxpayers tax rebates ranging from $250 to $500 and totaling $1 billion. The governor also wants to allocate an additional $1 billion in the fiscal year 2023’s amended budget to fund homeowner tax relief at the local level.
Meanwhile, Abrams has rolled out a plan to legalize casino and sports gambling to benefit the state’s HOPE scholarship. She also supports a $1 billion tax refund and free technical college for Georgians.
By T.A. DeFeo | The Center Square contributor