No matter which issues dominate the headlines during a legislative session, tax policy remains a hardy perennial. Whether a debate over eliminating the income tax, rising property taxes or special interests fighting for lucrative credits, taxes are always on the table under the Gold Dome. Similarly, no matter the strength of Georgia’s economy, its taxpayers will always judge effective governance at least partly by how their money is spent.
Georgia has seen consistent growth in the past few years in both spending and revenue and finds itself in a unique economic position only a few years removed from the COVID-19 pandemic: While revenue surges aren’t at their 2021 and 2022 levels, Georgia’s budget is still growing. Even though the state is spending more and more money each year, spending still lags behind revenues.
While the debate continues over how to maintain and capitalize on this strong financial position at the state level, one of the most consequential policy decisions for Georgians remains their local tax burden. Last year, the General Assembly passed House Bill 581, which provided a statewide floating homestead exemption that limits annual assessment increases on homestead properties to the rate of inflation. Cities and counties, but not school boards, could offset those revenues with a local option sales tax, or FLOST, of up to 1%. This bill’s ratification required a constitutional amendment on Georgia’s 2024 ballot, which Georgia voters approved by a 63%-37% margin.
Rising property taxes as a result of high property valuations and millage rates have elicited strong responses from Georgia residents, and this approach was an effort by state lawmakers to provide some relief. Before it was on the ballot, the Foundation summarized how the bill would attempt to do so. One key aspect, though, was that local jurisdictions had the choice to opt out of participating in the exemption.
A few months later, many school districts across Georgia have done just that. This is troubling, if not ironic, news for local taxpayers, as these opt outs have come despite Georgia school districts holding billions of dollars in reserves. Indeed, per pupil funding in the state has increased by 45% in five years, and the cumulative reserves of local districts amounts to $6.5 billion.
The legislature addressed that issue this year, kind of. What else did they do with tax policy? We have the details in this week’s commentary. We also have the latest news and analysis from the last week, including:
- Today is Sine Die as budget discussions continue
- State employment rates remain unchanged from a year ago
- Georgia lawmakers agree on school safety bill
- Atlanta Braves off to historically bad start
Have a great weekend,
– Kyle Wingfield
Friday’s Freshest
Georgia legislature passes omnibus lawsuit reform bill
The highest priority on Gov. Brian Kemp’s legislative agenda has made it to his desk. The General Assembly passed legislation aimed at curbing lawsuit abuse. Senate Bill 68 is a comprehensive tort reform package and is the culmination of an effort to reform Georgia’s judicial landscape.
2025 Session: One big win, and a scramble for the rest
Every legislative session is weird in its own way. There are sessions dominated by the budget, sessions oriented toward a particular brand of election-year politics, sessions shaped by a new personality in leadership or large turnover among the rank and file. The 2025 session is unique in this way: There has been exactly one “tier one” issue — lawsuit reform. There is no “tier two.” Everything else sits, at best, in “tier three.”
Justice for sale: How third-party litigation funding skews the legal system
You may be surprised to learn that some lawsuits are run as profit centers for loan sharks, institutional investors and even foreign governments. Welcome to “third-party litigation funding,” an innocent-sounding practice that puts profits – that word trial lawyers love to vilify – over justice, fairness and transparency. Transparency is a key aspect to this issue, because it’s sorely lacking at the moment. Details have emerged only in a few isolated – yet disturbing – cases.
WATCH: Georgia’s Lawsuits Are Being Bought—And You’re Paying
New beginnings are exciting. They can also be tough, which is why new initiatives don’t need any extra obstacles placed in their path. The pattern for new school choice programs around the country has been to ramp up slowly at first. Families may not know about them. Parents might want to wait and see how they’re working out for friends and neighbors before enrolling their own child.
How much does each school district have in reserves?
Across Georgia, public school districts are refusing to go along with a reduction in property taxes that was approved by voters last fall – all while raking in taxpayer dollars like never before. Cumulatively, Georgia’s 180 city and county school districts have more than doubled their reserves to a staggering $6.5 billion.
The Latest
Economy
Georgia-based Flock Safety opens new 97,000-square-foot manufacturing facility
Gov. Brian Kemp announced this week that Georgia-headquartered Flock Safety, a leading safety technology solutions provider, is opening a new manufacturing facility in Smyrna. The new 97,000-square-foot facility will create an estimated 210 new jobs over the next three years and represents an investment of approximately $10 million.
Tillery makes case for income tax elimination in budget speech
Georgia Senate Appropriations Chairman Blake Tillery ended his presentation of the fiscal year 2026 budget by telling his colleagues the state income tax could be eliminated. The state’s northern and southern neighbors, Tennessee and Florida, do not impose one. What would this look like for Georgia?
State employment rates unchanged from a year ago
Georgia’s unemployment remained at 3.6% for the month of February, which is unchanged from a year ago. The national unemployment rate is 4.1%, in comparison, according to officials with the Georgia Department of Labor. The state added 7,200 new jobs last month.
Hyundai’s plans for its new Georgia plant reveal an industry hedging its bets on EVs
A few years ago, Hyundai Motor Group triumphantly announced it would be opening a new plant near Savannah — a plant that would exclusively make electric vehicles. But last week at the grand opening of the new multibillion-dollar plant, the word “electric” wasn’t mentioned once. That’s not just a shift in rhetoric. Over the last few years, Hyundai has changed its plans: Instead of being a dedicated EV plant, it will also make hybrids.
Education
AFC celebrates Georgia Senate leaders for supporting Georgia students in budget vote
The American Federation for Children celebrates Georgia Senate leaders for maximizing the funding for the Promise Scholarship Program, ensuring that all students who need to participate in the state’s newest school choice programs can do so. As many as 22,000 children can access an education that meets their needs under the State Senate’s budget.
State Senate passes bill to double family compensation when teachers killed at school
The families of teachers killed in mass shootings and other violent acts at school would get double the money under legislation that has passed both chambers of the Georgia General Assembly but still awaits final approval after some changes. House Bill 105 passed the state Senate unanimously on Wednesday after unanimous passage by the Georgia House of Representatives.
Georgia lawmakers agree on school safety bill
Lawmakers gave final approval to a sweeping school safety bill inspired by a deadly shooting at Apalachee High School, sending the measure to Gov. Brian Kemp’s desk. House Bill 268 passed both chambers after months of negotiations and emotional testimony following the Sept. 4 shooting that left two students and two teachers dead in Barrow County.
Government Accountability
Long hours ahead for Georgia lawmakers on state budget compromise as session end deadline looms
On Wednesday, Georgia lawmakers debated and voted on numerous bills, but not the only one they are legally required to pass — the fiscal year 2026 budget. Georgia lawmakers must agree on a budget for the upcoming year, and the clock is ticking — today is the last day of the current legislative session. Negotiations over the budget are reaching a critical point as lawmakers struggle to find common ground on how to allocate the state’s funds.
Federal judge rules in Georgia’s favor in water dispute with Alabama
A federal judge has ruled in favor of Georgia in a long-running legal battle with Alabama over water rights tied to Lake Allatoona, siding with the U.S. Army Corps of Engineers’ decision to allow increased water withdrawals for metro Atlanta. The case centers on a 2018 decision by the Army Corps, which granted Georgia permission to draw more water from the Lake Allatoona reservoir.
Bill to improve rights of grandparents passes
A bill authored by state Sen. Mike Hodges, R-St. Simons Island, which will improve the rights of grandparents, has passed the House and Senate. Senate Bill 245 will allow grandparents who have an existing visitation order to solicit the court to modify that order upon the death, incapacity or incarceration of a parent.
Housing
Kemp signs bill allowing local bodies to rescind opting out of statewide homestead tax exemption
Local governments and school districts in Georgia can now rescind their decisions to opt out of a statewide homestead tax exemption approved by voters last November. Georgians voted to pass a state constitutional amendment to cap yearly property tax increases by basing property value on an annual assessment of the consumer price index. Still, local governments and school districts could have chosen to opt out of the tax exemption.
Savannah passes affordable housing ‘overlay’ zoning district, meant to boost city’s housing supply
The Savannah City Council approved an ordinance amending the city’s zoning code to create what officials are calling an Affordable Housing Overlay District, a move aimed at addressing rising housing costs and increasing residential density. The ordinance allows property owners to more easily develop high-density and multi-family housing in neighborhoods that have traditionally consisted of low-density, single-family homes.
Bonus
Braves are last winless team in baseball
An early uprising from a slumbering offense against two-time Cy Young Award winner Blake Snell on Wednesday night proved to be just part of a painful tease. Just when it looked like the Braves would claim their first win ahead of a cross-country flight, they were doomed by Shohei Ohtani on his bobblehead night.
Trump ushers in ‘new high water mark’ for deregulation
President Trump is following through on his pledge to usher in one of the most sweeping deregulatory drives in modern U.S. history, moving swiftly to slash environmental rules and bank oversight, remove barriers to cryptocurrencies, and reverse the Biden administration’s restrictions on energy production.
Buc-ee’s sues Missouri-based travel stop Barc-ee’s for trademark infringement
Texas convenience store chain Buc-ee’s has filed another lawsuit this year against a competitor. Buc-ee’s is suing Missouri-based Barc-ee’s for trademark infringement, according to a lawsuit filed in the U.S. District Court Western District of Missouri Southern Division. Barc-ee’s, which is temporarily closed, according to its website, describes itself as “a unique stop with coffee & food, a dog yard, and a kids’ western-themed mini city.”
Quotes of Note
“What I do know is that we’re gonna continue to recruit players that love football, are passionate about football and don’t put money as the number one answer.” – Kirby Smart
“Most economic fallacies derive from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.” – Milton Friedman
“In the spring, I have counted 136 different kinds of weather inside of 24 hours.” – Mark Twain
