Kemp also said he would restore $262 million in previous cuts to the higher education system, which would allow the technical college system to offer more programs in high-demand fields and remove a fee on university students that was first imposed during the Great Recession. The fee ranges from $200 a semester to more than $500.

The governor said he would enact legislation to eliminate the state income tax on retirement pay for military veterans, a proposal he first floated during his 2018 run that’s estimated to cost at least $60 million. Most senior citizens in Georgia already don’t pay income taxes on their unearned income, such as pensions.

It’s part of a broader strategy to use the state’s flush coffers to finance priorities — and pad voters’ wallets — in an election year.

The governor outlined his proposals at the Eggs & Issues breakfast hosted by the Georgia Chamber of Commerce, which each year draws many of the state’s most powerful business and political leaders.

The chamber recently endorsed Kemp’s reelection bid, siding with the GOP incumbent over his two fiercest rivals: former U.S. Sen. David Perdue, a Republican backed by Donald Trump; and Stacey Abrams, a Democrat seeking a rematch after her narrow 2018 defeat.

Kemp used the event to outline more of his campaign agenda at the start of the 40-day legislative session, adding to a growing list of reelection priorities he aims to push through the Republican-controlled Statehouse.

He’s previously endorsed plans to crack down on gang violence, let Georgians carry concealed handguns without permits, grant state employees a $5,000 pay raise, hike teacher salaries by $2,000 and ban the teaching of critical race theory.

‘Frugal’

The governor has the benefit of financial flexibility.

With help from federal stimulus dollars — a package that Kemp and other state GOP leaders opposed — Georgia took in a record amount of revenue in the last fiscal year and wound up with a $3.7 billion surplus. This fiscal year, Georgia is on pace to exceed those revenue numbers.

Kemp’s aides stressed that the funding for the tax refunds will come from the state’s surplus budget and not federal stimulus dollars. However, the state surplus was produced in part by federal COVID-19 relief that was sent to Georgians beginning in April 2020.

Kemp still must win over state legislative leaders who have their own priorities.

Credit: Ben Gray

Credit: Ben Gray

House Speaker David Ralston endorsed hiking state employee pay to stem a high turnover rate but said he advocates a “frugal” approach to tax cuts.

“Rather than spending like there’s no tomorrow, we’re going to do like we’ve always done and invest wisely and securely,” the Blue Ridge Republican said, adding that he doesn’t want any cuts that would jeopardize Georgia’s stellar bond rating.

The governor’s tax plan comes as he faces political pressure for deeper cuts. Perdue entered the race with a promise to end the state income tax, which brings in more than half of the state’s revenue.

“We’ve got to be more competitive. There are ways to pay for it, and other states have accomplished that,” Perdue recently told The Atlanta Journal-Constitution. “I’ll work with the Legislature on it — instead of fighting with them — to make this a reality.”

Democrats have largely opposed income tax cuts, saying that the taxpayer dollars should be used to expand Medicaid, bolster public education and fund infrastructure projects.

Kemp said Wednesday that he would work with budget writers in the state House on “ideas related to cutting income tax,” though he didn’t offer specifics. The governor last year signed a law that amounted to a roughly $100 income tax cut for most married couples.

“As Georgians seek to recover from the economic impact of a global pandemic,” Kemp said, “we as state leaders should do everything we can to empower families to keep more of their money in their own wallets.”

Tax refund plan

Gov. Brian Kemp unveiled a plan Wednesday to give refunds to state taxpayers totaling $1.6 billion.

Under the plan, all Georgians who file their income taxes in April would receive a refund: $250 for single filers and $500 for joint filers.

The refunds are part of the governor’s budget proposal, which will require approval by the General Assembly.