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State budget under review at the General Assembly

Georgia’s $32.8 billion fiscal 2024 budget request contains a $6.6 billion surplus from capital gains tax payments
Georgia Capitol Atlanta
Georgia Capitol in Atlanta Credit: Grice Connect

The General Assembly has begun reviewing the state’s $32.8 billion fiscal 2024 budget request.

The three day review began on Jan. 17 and will consist of a three-day hearing.

The proposed budget contains a $6.6 billion surplus, which stems from an increase in the state’s capital gains tax payments, something the state’s chief economist says will likely not repeat in the future.

Jeffrey Dorfman, chief economist for Georgia, notes that only 2% of Georgia businesses account for 96% of the record $2.5 billion the state collected in corporate income taxes last year.

He indicates that if these businesses don’t make as much money, the state will not collect as much tax.

The state’s fiscal year ends on June 30, and according to Dorfman its economy remains strong. The workforce has risen by 167,000 jobs, and Georgians are saving 2% to 4% of their incomes, even though post-pandemic spending is on the rise.

However, individuals are paying more in income taxes due to pay raises and inflation driving up prices.

Looking forward, Dorfman expects a 3.5% increase in personal income taxes during the current fiscal year and a slight rise in sales taxes.

He also anticipates capital gains taxes to all but disappear and corporate sales tax payments to shrink in the coming years.

Despite the anticipated hit on revenue from declining corporate taxes, the state’s current surplus means that it can afford tax relief.

Governor Brian Kemp is calling for an additional $1 billion state income tax rebate on top of the rebate the General Assembly approved last year, as well as $1.1 billion in property tax relief.

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