Georgia House Republicans are proposing additional tax cuts for parents.
House Speaker John Burns announced Wednesday that his Republican caucus supports a plan to increase the amount parents can deduct from their annual state income taxes per child to $4,000 from the current $3,000. Georgia's income tax rate is currently 5.49%, so that would mean an increase of up to $55 per child, or about $150 million statewide.
“As child care costs continue to rise every day, we hope that the additional $1,000 per child credit will help parents relieve some of their child care costs,” Barnes said at a press conference. '' he told reporters.
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The new tax cut proposal comes as Burns and 235 other members of the House and Senate are up for re-election later this year.
He also reiterated an earlier proposal to increase the state housing exemption from $2,000 to $4,000. That amount could save homeowners across the state nearly $100 million, according to projections. Senators could counter with a plan to cap the rate at which real estate valuations can increase for tax purposes, potentially limiting future property tax increases.
If the measure passes, voters across the state would have to approve expanding the exemption amount in a November referendum.
Here, Georgia House Speaker John Burns announces plans for an additional state income tax credit for parents, which would amount to about $55 per year per child, at the state capitol in Atlanta on January 24, 2024. It is said that there is a possibility of saving. (AP Photo/Jeff Amy)
Burns also supports Republican Gov. Brian Kemp's plan announced in December to accelerate already planned cuts in the state's income tax rate. As of Jan. 1, Georgia's income tax rate was a flat 5.49%, part of a 2022 law passed that transitions from a series of income brackets that topped out at 5.75%.
If state revenues are maintained, the income tax rate is expected to decline by 0.1% annually to 4.99%. The plan announced in December calls for the tax rate to be retroactively reduced to 5.39% as of January 1st. The changes are expected to generate $1.1 billion in windfall revenue for the state, including an additional $300 million from the reduction from 5.49% to 5.39%.
Mr. Burns also unveiled a plan to move all of Georgia's unallocated surplus cash into its rainy day account, a bill also promoted by Mr. Kemp. Georgia had an unallocated surplus of $10.7 billion at the end of last budget year, in addition to a rainy day fund that was filled to the statutory cap of $5.4 billion, or 15% of the previous year's tax revenue.
Burns said the measure would “enable the state to save responsibly and build reserves and provide more taxpayers in both the short and long term, even when Georgia's fiscal position may not be as strong.” We will be able to provide a lot of relief.”
Kemp spokesman Garrison Douglas said in a statement that by designating the funds as savings, the company “maintains our commitment to prudent fiscal management that responsibly meets future needs and priorities.” Ta.
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It's unclear what effect putting all that extra cash into a rainy day fund will actually have. Lawmakers can only spend up to the amount Kemp approves, whether it's through the rainy day fund, unallocated surplus or general revenue.
But political pressure to spend the unallocated surplus could ease, something Kemp has largely resisted before allocating $2 billion of it to spending in the current budget proposal. Democrats have attacked the surplus, saying the state is hoarding cash while ignoring critical needs.
“We're starting this year with a $16 billion surplus and $11 billion in unallocated funds,” Sen. Nabila Islam Parks, D-Lawrenceville, said at a news conference last week. “This is not monopoly money. This is hard-earned tax money that should be reinvested to improve the lives of all Georgians.”
