Georgia reports nearly $11B in cash reserves after 3rd year of big surpluses
Brian Kemp, governor of Georgia, speaks during a news conference at a mass covid-19 vaccination site at the Delta Flight Museum in Hapeville, Georgia, U.S., on Wednesday, Feb. 25, 2021. (Photographer: Elijah Nouvelage/Bloomberg via Getty Images)
Georgia now has $10.7 billion in surplus cash that its leaders can spend however they want after the state ran a huge surplus for the third straight year.
The State Accounting Office, in a Monday report, said Georgia ran a $5.3 billion surplus in the 2022 budget year ended June 30, even after spending $32.6 billion.
Total state general fund receipts rose about $1 billion, or 3%. But because Gov. Brian Kemp has kept budgeting spending well below prior year revenues, the amount of surplus cash at the end of each year keeps rising.
The state has other reserves, as well, including a rainy day fund filled to the legal limit of $5.4 billion and a lottery reserve fund that now tops $2.1 billion. All told, Georgia had about $18.5 billion in cash reserves by June 30, an amount equal to more than half of projected state spending for the current budget year.
The $10.7 billion tower of cash is enough to give $1,000 to every Georgia resident. It grew taller even though the Republican Kemp rolled back collection of state gasoline and diesel taxes for much of the budget year, funding more than $1 billion in road and bridge construction from other sources. The governor also persuaded lawmakers to fund a $1.1 billion income tax break out of surplus funds. Without that, Georgia would have closer to $13 billion in extra cash.
Kemp is already dipping into the surplus for tax breaks again after he issued a novel legal declaration finding that high prices were an emergency in September and again waived the collection of Georgia’s gasoline tax of 29.1 cents per gallon and its diesel tax of 32.6 cents per gallon. Lawmakers must ratify the move when they return in January, but Republican leaders of the state House and Senate have voiced support.
Some state tax collections are cooling off, especially once $185 million a month in fuel taxes are knocked off. The governor’s office said Monday that state tax collections in September, when motor fuel tax collections are excluded, fell by about $100 million compared to the same month in 2022. The declines are mostly in personal income tax collections.
But Georgia is likely to run another multibillion-dollar surplus in the budget year that began July 1, unless revenues fall much more sharply.