Georgia lawmakers reached a compromise on the mid-year budget Wednesday, fulfilling priorities of the three main players with a little help from extra money.
To overcome an impasse after the state House and state Senate took money from each other’s priorities — and from Gov. Brian Kemp’s — to pay for their own projects, Kemp dug up an extra $1.4 billion in surplus funds.
So, the amended fiscal year budget for 2026 that was a $42.3 billion is now nearly $43.7 billion.
A chunk of that is for one-time givebacks to taxpayers.
The House put $850 million into the budget for property tax rebates to homeowners.
Kemp had put $250 income tax rebates ($500 for couples filing jointly) into his budget request. The House and Senate liked the idea and set aside over $1 billion to pay for it.
“Between the two relief initiatives, this body is returning $2 billion dollars back to the citizens of our state,” said Rep. Matt Hatchett, R-Dublin.
Hatchett, who chairs the House Appropriations Committee, said lawmakers will approve the income tax rebates later.
“The winners in this budget are the taxpayers of Georgia,” said Sen. Blake Tillery, R-Vidalia, the chairman of the Senate Appropriations Committee who was, with Hatchett, a member of the conference committee that negotiated the final line items in House Bill 973.
Several of Kemp’s big-ticket items that were raided earlier in the budgeting process were fully restored.
The Senate had cut his $2,000 bonus to state employees nearly in half, but the conference committee restored the more than $600 million needed to pay for the full one-time supplement.
The $325 million Kemp wanted for a need-based scholarship program called Georgia DREAMS got back into the budget after it was trimmed by the House and nearly eliminated by the Senate.
It returned with the help of $145 million in surplus funds from the state lottery, which also funds the HOPE and Zell Miller scholarships and pre-kindergarten.
Lawmakers also restored Kemp’s $50 million in community grants to address homelessness, although the budget now earmarks $5 million of that for homeless veterans.
The Senate got the big item it had added: $409 million to build a regional hospital for the mentally ill, who often wind up housed in local jails. The House got $150 million to expand prison bed capacity.
One of Kemp’s big-ticket projects remained but got trimmed a bit. He asked for $1.8 billion for new dedicated express lanes on I-75 south of Atlanta and got $1.68 billion. He wanted $200 million to add interchanges to State route 316 connecting Athens to metro Atlanta, and the General Assembly gave him $185 million.
Cities and counties will get another $250 million in grants for road maintenance and improvement, and the state will invest $100 million to repair and replace rural bridges, prioritizing those most vital to agribusiness and timber projects.
HB 973 passed the House 169-2, and it passed the Senate unanimously.
Next, lawmakers must craft the full budget for fiscal year 2027, which will dictate spending starting July 1.