ATLANTA, GEORGIA — Today, the Georgia Budget and Policy Institute (GBPI) released a statement in response to Georgia’s year-end FY 2023 report of revenues and reserves. The state raised $37.7 billion in total state funds, substantially exceeding the $32.6 billion estimate made by Gov. Kemp by $5.1 billion. Further, state agencies remitted an additional $501 million in unspent funds, on top of the $350 million originally reserved for the Mid-Year Adjustment for K-12 Education, bringing the total added to Georgia’s reserve accounts at the conclusion of FY 2023 to $6 billion.
The reported $6 billion surplus for FY 2023 is in line with a three-year pattern of historically large, multi-billion-dollar surpluses that bring the total balance of Georgia’s reserve accounts to nearly $18.5 billion. This balance includes approximately $5.4 billion in the Revenue Shortfall Reserve—the maximum allowed under state law—and approximately $10.7 billion in ‘undesignated surplus’ accounts. Other reserve accounts include the Lottery for Education, with a balance of $2.2 billion, Tobacco Settlement Funds, with a balance of $158 million, and the Guaranteed Revenue Debt Common Reserve Fund at $45 million.
Despite the state holding billions in surplus funds—and a recurring multi-billion-dollar imbalance between state spending and revenue collections—the $32.4 billion budget signed into law by Gov. Kemp for FY 2024 represents a flat level of spending that remains well below the state’s capacity and fails to meet the needs of Georgians across core areas, like health care and public education.
Overall, the Governor’s FY 2024 revenue estimate projects that year-over-year tax revenues will fall by about 13%, representing the worst performance on record since at least 1980. Similarly, Gov. Kemp projected that tax revenues for FY 2023 would decrease by 14% from the previous fiscal year, however, the state reported that year-over-year collections were flat—an imbalance of $4.6 billion.
On October 30, GBPI will release a report evaluating Georgia’s fiscal position and offering targeted recommendations for the unprecedented level of undesignated reserves, which now stand at $10.7 billion above and beyond the state’s Rainy-Day Fund (Revenue Shortfall Reserve).
Statement from GBPI Senior Fiscal Analyst Danny Kanso:
“With over $10.7 billion in undesignated reserves at the conclusion of Fiscal Year (FY) 2023, Georgia is positioned to make historic investments in the future of its residents by expanding access to affordable child care, upgrading tens of thousands of school buses and addressing a host of urgent workforce needs,” said GBPI Senior Fiscal Analyst Danny Kanso.
“Abundant resources are available to sustain both major one-time investments and to address ongoing needs across state government. Georgia’s current revenue estimate projects the sharpest drop in tax revenues in over four decades, even as the state reports year-over-year tax revenues that have increased by 6.1% through the first quarter (3 months) of FY 2024. Georgia can make significant improvements by aligning the state’s budget more closely with the current, recurring revenue collections and responsibly allocating the available $10.7 billion for investment in the state’s future.”