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Gov. Kemp urges $1 billion tax rebate, income‑tax cut and major education investments in State of the State
Summary
In a joint session address, Governor Brian P. Kemp proposed a $1 billion one‑time tax rebate, a 20‑basis‑point cut to bring the state income tax to 4.99%, a $2,000 one‑time pay supplement for state employees, and a $325 million endowment for a need‑based 'Dream Scholarship.' He emphasized record reserves, cash‑funded capital spending and continued investments in public safety.
Governor Brian P. Kemp delivered the State of the State to a joint session of the Georgia General Assembly, proposing a package of tax and budget measures the administration says will return surplus revenue to taxpayers while funding education, workforce and public‑safety priorities.
Kemp announced a fourth one‑time $1,000,000,000 tax rebate this year intended to return what his administration describes as surplus revenue to Georgians, saying the average filer would save about $250 and married filers up to $500. "With this rebate, my administration and this General Assembly will have returned over $7,500,000,000 in surplus revenue to the taxpayers of our state over the last 4 years," he said.
The governor also proposed a further 20‑basis‑point reduction in the state's personal and corporate income tax rate, bringing the rate to 4.99%. "This will fulfill a promise to the people of the state that I made during my reelection campaign to lower our state income tax rate to under 5%," Kemp said, and he framed the move as fiscally responsible because it would be paid with one‑time money rather than ongoing revenue.
Kemp told lawmakers he planned a one‑time $2,000 pay supplement for all state employees, including educators and public‑safety officers. He described the proposal as part of continued efforts to recruit and retain state workers and to recognize recent investments in raises and supplements.
On education, Kemp highlighted increases in teacher pay during his administration and proposed a new, one‑time $325,000,000 endowment for a "Dream Scholarship," which he described as the state's first need‑based scholarship endowment. The governor said the budget would also add $2,100,000 for medical residency slots and other higher‑education investments intended to expand workforce training.
Kemp touted fiscal metrics the administration says underpin these proposals: record rainy‑day reserves reported at more than $10,000,000,000, $4.1 billion in capital projects funded with cash since 2024 to reduce debt and save interest costs, and $6,000,000,000 in investments for water, sewer and transportation projects.
The address also emphasized public‑safety measures. Kemp proposed increasing the state's matching contribution to certain retirement accounts for eligible law‑enforcement officers and raising the match cap from 9% to 15% over time. He credited new units and prosecutions for gains against human trafficking and gang activity and said additional legislation would be introduced to expand protections and prosecutions.
Kemp framed the proposals as a continuation of conservative fiscal management that, he said, allows the state to return money to taxpayers while investing in schools, safety and infrastructure. "If we have more than we need, we give it back to the people who actually earned it," he said.
The joint session ended after the address; the House later carried routine business including adopting privilege resolutions and listing first readings of many bills.
What happens next: Kemp's proposals require action by the General Assembly through the budget process; the House adjourned until the next scheduled meeting on 2026‑01‑16.
