The Georgia Senate on Wednesday unveiled a spending plan that grants income and property tax relief, builds a new mental health hospital and cuts back state employee bonuses.
The proposed amended fiscal year 2026 budget differs substantially from plans unveiled earlier by Gov. Brian Kemp and the state House of Representatives. Here’s what you need to know about the $42.3 billion spending plan.
Tax relief
In January, Kemp unveiled plans to spend $1.2 billion of the state’s ample budget reserves on income tax rebates. Under the governor’s proposal, single filers would receive up to $250, heads of household would get up to $375 and married couples filing jointly would get up to $500.
The House version of the budget scrapped that plan in favor of $850 million in property tax refunds. Supporters say the plan would mean an average of $500 for homeowners.
The Senate plan sidesteps the conflicting priorities of the governor and House by including both proposals. Any property tax relief would require Kemp to approve releasing more of the state’s reserves or finding savings elsewhere in the budget.
Smaller employee bonuses
The Kemp and House versions of the budget include $2,000 one-time salary supplements for state employees. The Senate version scales those bonuses back to $1,250, saving about $230 million.
Senate Appropriations Committee Chairman Blake Tillery, R-Vidalia, said that if the General Assembly approves the Senate’s proposed income tax cut, employees and other Georgians would get additional tax relief.
New mental health hospital
The Senate budget includes $409 million to build a new 300-bed mental health hospital. The move comes after the state and the U.S. Justice Department announced an end to federal oversight of the Georgia Department of Behavioral Health and Developmental Disabilities.
Tillery said the hospital will alleviate problems at local jails across the state, where many people with mental health problems are housed.
Need-based college scholarships
Kemp proposed spending $325 million on the state’s need-based DREAMS scholarship program. The House budget scaled that back to $300 million, and the Senate reduces it further to $100 million.
Tillery said the program would still be a substantial new investment in need-based aid and would be more than enough to attract private donations to the program.
Sen. Nan Orrock, D-Atlanta, expressed concern about the smaller investment. She said other states have surpassed Georgia in helping students who can’t afford college.
“Right now we’re having students leave our state and go to surrounding states that all have robust financial aid for higher education,” Orrock said.
Homelessness
The proposals from the governor and the House include spending $50 million to address homelessness through grants to local governments and nonprofits. The Senate budget reduces that to $25 million, including $15 million to address homelessness among Georgia veterans. Tillery said the money would be enough to eliminate homelessness among veterans.
What’s next
With three versions of the amended fiscal year 2026 budget on the table, the differences must be ironed out through negotiation. Both chambers also must approve proposed fiscal year 2027 budgets before they adjourn April 2.
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