Kemp made the announcements in the Capitol, flanked by Republican lawmakers, just two days after his rival Abrams presented her economic plan in a high-profile address.
Lawmakers — including House Speaker David Ralston, R-Blue Ridge — said the state leaders’ policies helped build the surplus and make the tax breaks workable.
“Leadership matters, elections matter,” said Senator Burt Jones, R-Jackson, the GOP nominee for lieutenant governor.
They failed to mention that the federal government’s massive COVID-19 pandemic aid helped build the surplus. So does inflation, as higher prices and wages drive up income and sales tax collections.
Abrams has also said that if elected, she will spend part of fiscal 2022’s surplus on a $1.1 billion income tax refund. She also wants excess funds to be used to raise salaries for teachers and law enforcement officials and to help fund an expansion of Medicaid, the health care program for the poor and disabled, to cover more people.
The Democrat has urged Kemp to work with the Biden administration to get approval to use federal COVID aid for a tax refund now, rather than waiting until next year.
“Georgians need relief today. Brian Kemp could work with the (Biden) administration to make that happen, but he doesn’t care,” Abrams spokesman Alex Floyd said. “Instead, Kemp will copy Stacey Abrams’ tax refund proposal, but will force Georgians to wait until after an election.”
Kemp and the Treasury Department announced last month that state tax collections ended fiscal 2022 on June 30, up more than $6 billion from the prior year.
The latest income tax refund proposed by Kemp and Abrams would work like this year’s.
Under this year’s House Bill 1302, eligible single Georgians received a $250 rebate, and joint claimants $500. Refunds have been approved for those who filed returns for tax years 2020 and 2021.
It also said that Georgians could not get a higher tax refund than what they paid in taxes.
Some seniors later found they wouldn’t get the tax refund because other state exemptions mean they didn’t owe state income taxes. However, more than 2.6 million refunds have been sent to eligible Georgians.
Like this year, the rebates, if approved by lawmakers, would likely expire in the spring.
Kemp’s proposed property tax break would revive a program started by Democratic Gov. Roy Barnes in the late 1990s that sent money to local property tax officials to increase the real estate tax exemption. The tax break only applies to the owner’s primary residence.
On average, homeowners would save $500 in property taxes, according to Kemp.
The increased homestead exemption was discontinued during the Great Recession because the state could not afford it. Kemp’s proposal to revive it could be a year-long affair, as lawmakers would have to add money to future budgets to pay for it.
Earlier this year, Kemp also signed legislation lowering income tax rates.
As is usually the case with tax rate cuts, the biggest beneficiaries will be the top earners. They pay a lower percentage of their higher income. But proponents say almost everyone will see something of the tax cut.
Abrams came up with this disparity in benefits from the tax rate cut earlier this week.
“All too often, when Georgia has been at a crossroads, Republicans have used their power in favor of the rich and more powerful at the expense of the rest of us,” she said. “Tax cuts for the rich instead of bailing out rural hospitals. Billions in incentives for big companies, but junk for the little guy.”
The surplus this year is likely to be more than $5 billion, and Kemp’s tax cut plan would only spend $2 billion of that.
Some money is going into state reserves, and Kemp is using excess funds to offset the $150 million to $170 million the state is losing because it doesn’t collect its gas tax. Kemp has suspended collections in hopes of mitigating the impact of higher fuel costs.
The governor told reporters there would be discussions in the coming months about what to do with the rest of the excess money. With the reelection campaign looming, Kemp is certain to announce more proposals to spend at least some of the money ahead of the November election.
“There are other things that the General Assembly will consider, there are other things that we are looking at,” he said.