Kemp proposes $ 5,000 increase for state agency employees

ATLANTA – Georgia Gov. Brian Kemp on Friday announced a proposal to give a $ 5,000 annual pay rise to state agency employees as lawmakers examine what is likely to be an income picture prosperous state.

Kemp would add largesse for state employees to the remaining $ 2,000 of a $ 5,000 pay raise he wants to give K-12 teachers.

State revenues through November exceeded the $ 27.3 billion lawmakers designated for spending in the current budget year through June 30. Georgia plans to spend $ 49.9 billion in total in the fiscal year that began July 1, once federal and other funds are included.

In a letter to heads of state agencies on Friday, Kemp thanked them for finding ways to cut costs and said he had constantly heard from them that compensation for state employees should be improved to reduce staff turnover. He wrote that he had included in his budget proposal for consideration by the legislature an annual salary increase of $ 5,000 for full-time government employees eligible for benefits, effective April 1, and a increase in employer matching for 401 (k) contributions from a maximum of 3 percent to a maximum of 9 percent.

“I am confident that these strategic investments in our government workforce will improve our ability to serve hardworking Georgians,” Kemp wrote.

With this extra money, Gov. Brian Kemp wants lawmakers to increase teachers’ salaries by an additional $ 2,000, fulfilling his promise to give teachers a $ 5,000 raise over four years. It is expected to cost $ 461 million. It would cost $ 383 million to bring the state’s K-12 funding formula up to the total amount it says the state should provide to schools. The state could also restore austerity cuts to universities.

“The only thing I’m pretty sure the austerity budget will be restored,” said House Appropriations Committee chairman Terry England, a Republican from Auburn.

Lawmakers could seek to meet one or both of these priorities as early as the amended budget for the current year, England said. These budget changes usually begin on March 30. But salary increases could be complicated in the current year, as school districts also pay employees out of local funds and typically match state increases for locally paid employees.

England has said a mental health overhaul plan will likely cost an additional $ 75 million and senators want to spend more on foster families. But other state agencies may not recover the cuts that were made in 2021 at the start of the pandemic.

Democrats would like to fully expand Medicaid, but Republicans still oppose it. Lawmakers budgeted for a smaller Medicaid expansion than Kemp proposed, but it has been blocked by federal officials and it’s unclear what will happen to the money set aside for it.

England and Senate Credit Committee chairman Blake Tillery, a Republican from Vidalia, said the state may have to increase the salaries of out-of-school employees due to inflation and competition for workforce. Lieutenant Governor Geoff Duncan calls for salary increases for prison employees. Tillery said a general salary increase could be considered in addition to additional increases for areas of employee shortages. But Ralston warns that there may not be enough money for everyone.

“I’m trying to count the number of groups that were promising pay increases. The list is growing every day,” said Ralston. “And I know we’re in pretty good budget shape, but at some point, you know, we’re going to run out before we get to everyone.”

A tax cut is likely to focus on income tax. Senate Speaker Pro Tem Butch Miller, a Gainesville Republican candidate for lieutenant governor, joined the main opponent, Senator Butch Jones, a Republican from Jackson, in proposing to abolish the income tax of the state.

House Speaker David Ralston rejects the plan, saying the state cannot afford to sacrifice nearly half of its revenue.

“It’s become one of those things that sounds great on a bumper sticker or a sound clip or maybe even a campaign ad,” Ralston told reporters Thursday. “But we have to govern; we have to make decisions. I think taking it step-by-step is a much more desirable way of doing it.”

Georgia’s top tax rate remains at 5.75%. Before the pandemic, House Republicans had wanted to reduce that rate by a quarter of a point to 5.5%, which is expected to cost more than $ 500 million. Other approaches could be to further increase the standard deduction a person can earn before they start paying taxes, making Georgia income tax a flat rate, or a combination of the three. Last year, lawmakers increased the standard deduction, a tax cut of $ 140 million.

Lawmakers may also be called upon to decide how to spend a $ 2.2 billion surplus that has built up even after the state’s rainy day fund has been filled to the legal limit of 4.3. billions of dollars. England said the state could choose to pay for some capital improvement projects directly instead of borrowing through bonds.

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