Kemp directs Georgia agencies to keep spending stable after he leaves the governor's office

Gov. Brian Kemp is directing state agencies to keep their spending at stable levels for the next fiscal year after he leaves office.

In a memo sent earlier this month to state agency heads, Richard Dunn, the director of the Georgia Office of Planning and Budget, said that the move was necessary to ensure development in the state continues while also allowing a recent reduction in the state's income tax.

In May, Kemp signed House Bill 463, known as the Georgia Economic Growth and Tax Relief Act of 2026, which lowered Georgia's state income tax rate from 5.19% to 4.99% from the start of the year onwards. The law allows for future annual reductions of 0.125% until the rate reaches 3.99%, as long as the economic conditions allow for the drop.

The new law also increased Georgia's standard deduction for single filers and married couples, with annual increases until they reach $18,000 and $36,000, respectively. These increases would only take effect if tax collections rise by at least 3%.

To offset the costs of the tax cuts and the recent suspension of the gas tax, Kemp trimmed $300 million from the state's $ 36.6 billion budget - cutting money from the Department of Community Health, the Department of Behavioral Health and Developmental Disabilities, and other agencies.

While the next fiscal year's budget will be signed by either Republican Rick Jackson or Democrat Keisha Lance Bottoms, the agency budget submissions are due by Sept. 1, while Kemp is in office.

"We have built strong reserves and reduced long-term liabilities to leave the state in a strong financial position to withstand any future economic downturns. We have accomplished all of this while also delivering the largest tax relief in state history by returning more than $13 billion to taxpayers since 2019," Dunn wrote. "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."

Dunn wrote agencies with one-time priorities or other growth needs could request a redirection of funds within their existing budgets. Any agency with urgent requests that would require adjustments should work with his department to address the need during the budget development process.

The official also asked agency heads to prepare contingency plans identifying places to save money in a worst-case scenario that cuts need to be made.

"While current revenue projections are expected to be sufficient to meet the state's mandatory growth obligations, these plans help ensure the state can respond effectively to changing economic conditions or new budget priorities that require the reallocation of existing resources," he said.