(The Center Square) – The Georgia Senate added Gov. Brian Kemp’s tax rebates back into the fiscal year 2026 midyear spending plan but reduced bonuses for state employees.
The House of Representatives removed the rebates in its proposed spending plan. Kemp’s plan would have used $1 billion of the state’s surplus for tax breaks of up to $500 for married couples and $250 for single filers.
The Senate plan presented by Appropriations Chairman Blake Tillery, R-Vidalia, kept property tax relief added by the House, which would provide about a one-time allocation of about $500, according to lawmakers.
Proposed $2,000 bonuses for state employees were reduced to $1,250 in the Senate version of the plan.
“If we are able to reduce and eliminate the state income tax on families making $100,000 or less, well, that puts $1,000 back in their pocket,” Tillery said. “For the average state employee making $50,000, that puts 500 additional dollars in their pocket and it doesn’t just do it just one year. It does it every year.”
Lawmakers are considering Senate Bill 476, which increases the standard deduction for married couples from $24,000 to $100,000 and from $12,000 to $50,000 for single filers, which would completely eliminate the state income tax for some, according to Tillery. It passed the Senate and is in the House.
The Senate added $409 million for a new forensic mental health hospital, the state’s first in more than 60 years.
“We have asked our jails to be our mental health hospitals,” said Sen. Brian Strickland, R-McDonough. “We have sent people with mental illness, with addiction to get help at the county jail. I’m proud of this Senate for stepping up today and saying, ‘That’s not how we are doing to do things in Georgia anymore.'”
The Senate reduced the allocation for the state’s first need-based scholarship from $325 million proposed by Kemp to $100 million. Sen. Nan Orrock, D-Atlanta, questioned the reduction. She chaired the Senate Study Committee on Higher Education Affordability that recommended the scholarship. Tillery said the question goes beyond college affordability.
“If students felt that their value-add from a college degree helped them further their education, get better jobs and make more in the future, then I think they would find more value in college and they would be willing to take on those loans,” Tillery said.
The Senate approved the $42.3 billion midyear spending plan on Friday by a vote of 49 to 1. Sen. Jaha Howard, D-Smyrna, cast the lone “no” vote.
The two chambers will hammer out a final plan to be presented to both bodies for approval.
