Georgia Governor Brian Kemp delivered his final State of the State address on January 15. What were the major themes of Gov. Kemp’s address? Fiscal responsibility and returning taxpayer money back to Georgia taxpayers.
The first priority policy for Gov. Kemp is a $1 billion tax rebate. This might sound familiar to Georgians because it would be the fourth time in the last four years that the state returned surplus tax money back to hard-working Georgians. As proposed by Governor Kemp, the rebate would return on average $250 to individuals and $500 to married couples. In total, this would mark more than $7.5 billion in returned taxpayer funds since 2023.
More important for long-term growth in the state, Gov. Kemp proposed an additional cut to the state’s individual and corporate income tax rates. The governor’s proposed cut would drop both rates from the current 5.19 percent to 4.99 percent. As recently as 2023, Georgia’s tax rate was 5.75 percent and among the higher half of states with income taxes. Dropping the rate below 5 percent would be a significant accomplishment for Georgians who would keep more of their money in their own pockets.
Lowering corporate and personal income taxes can be a huge boost to a state’s economic growth and taxpayers. These taxes stifle innovation and, in some cases, may drive entrepreneurs out of state. Academic research has shown that personal and corporate income taxes have significant negative effects on innovation in the state, leading to fewer patents issued and fewer inventors residing in the state. By lowering those rates, Georgia will keep its economy competitive and encourage entrepreneurs move into the state rather than flee.
While ensuring that Georgians keep their hard-earned money was Gov. Kemp’s major priority, he also emphasized the work that state has done to be good stewards of the taxpayer money the state does keep. In the process of demonstrating fiscal restraint, the state has compiled a rainy-day fund of more than $10 billion to ensure that future economic downturns won’t invite future tax increases. This will be crucial for the state’s long-term growth. In addition, to the tax policies, Gov. Kemp outlined a series of raises for state employees and new need-based scholarships for state universities.
Although Gov. Kemp is in his final year in office, his state of the state address makes clear that we can expect him to step up for free enterprise, as he has done in past sessions.