GBPI Reacts to $344 Million in Spending Cuts through Executive Budget Disregards to Fund Tax Cuts for Corporations, Top Earners

ATLANTA - This week, Gov. Kemp issued a combined 157 budget disregards and line-item vetoes, cutting more than $344 million from the Fiscal Year (FY) 2027 budget approved by the General Assembly through House Bill 974. Budget disregards act similarly to line-item vetoes and allow the governor to hold back funding for certain line items of the budget approved by the General Assembly. Most of these sweeping cuts will remove funding for public education ($88 million), healthcare ($82 million) and human services ($16 million). Gov. Kemp made clear that these spending cuts are intended to partially offset the cost of income tax cuts approved through HB 463, which will deliver outsized benefits to corporations and those already at the top of the economic ladder.

"The primary responsibility of Georgia's state leaders is to pass a balanced budget," said Staci Fox, GBPI's President & CEO. "Instead of meeting that obligation, the Governor and legislators instead chose to prioritize tax cuts for the wealthiest Georgians, creating a structural deficit that jeopardizes the state's ability to meet the needs of its residents. Even after these cuts, Georgia's budget remains out of balance, potentially requiring the state to use one-time funds to cover part of the cost of recurring tax changes. Rather than continuing down this fiscally irresponsible path that will harm countless Georgians, lawmakers should act to raise sufficient revenue to balance the state's budget. They should rollback cuts to the state's income tax rate that will do little for most Georgians and are designed instead to enrich those already earning the highest incomes."

In the coming days, GBPI will release a full estimate of the cost of income tax cuts approved through HB 463, along with an analysis showing the legislation's distributional effects. Below is a summary of the budget disregards issued by Gov. Kemp that will reduce funding for critical areas in FY 2027.

FY 2027 Budget Disregards and Line-Item Vetoes by Category:

• Employees' Retirement System: $100 million (29%)
• Health: $81.8 million (24%)
• Pre-K - 12 Education: $61.5 million (18%)
• Higher Education: $26 million (8%)
• Public Safety/Corrections: $31.4 million (9%)
• Human Services: $15.8 million (5%)
• Transportation: $11 million (3%)
• Other Areas of State Government: $16.7 million (5%)

Significant budget disregards and line-item vetoes:

Health:

• Disregards the full $48 million in new Medicaid reimbursement rate increases that support a range of providers and facilities from primary care and dental care to psychiatric residential treatment.
• Disregards $4 million for a rural hospital solvency evaluation plan. Many rural hospitals already operate on thin margins and changes to Georgia's state directed payment program will result in the loss of an estimated $626 million in supplemental federal provider payments for rural Georgia providers over the next decade. Without intervention, more rural hospitals with be forced to reduce services (like Mary's in Lavonia) or close altogether.
• Disregards $9 million in new funds that would allow more Georgians with intellectual and developmental disabilities to receive services in their homes and communities. This reduces the number of new NOW/COMP waiver slots to 100, which represents a mere 1% of the planning list.

Education:

• Disregards $30.7 million for additional school transportation and support for bus operations. This loss will harm local school systems just as the state has enacted a separate measure (SB 33), which will limit property tax revenue growth in future years.
• Vetoes $12 million in bonds for financing $50 million in school safety equipment grants.
• Disregards $5 million for equipment needs at Central Georgia Technical College that would support Georgia's healthcare workforce.
• Disregards $2.7 million for one one-time grants that would allow school systems to purchase vision and auditory screening equipment, which was part of the General Assembly's literacy package.
• Disregards $5 million in additional out-of-school care for statewide and community grantees.

Human Services and Supports for Georgians:

• Disregards $9.4 million in funding for domestic violence shelters and $3.3 million for sexual assault centers.
• Disregards $2.5 million that was intended to help support veterans who are unhoused.
• Disregards $2 million to stop the state's participation in the SUN Bucks summer nutrition program that would provide meals and snacks to students.
• Disregards $2 million to support caregiver support services for Georgia seniors.
• Disregards $1.5 million for child welfare services to support family reunification, youth exiting foster care and at-risk families.

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