The Georgia Budget and Policy Institute’s mission is to advance lasting solutions that expand economic opportunity and well-being for all Georgians.
Staci Fox, President and CEO
Jessica Woods, Vice President of Finance and Operations
Leah Chan Director of Health Justice
Ashley Young Senior Education Analyst
Narek Boyajian Fund Georgia’s Future Coalition Manager
David Schaefer Vice President of Research and Policy
Danny Kanso, PhD Director of Legislative Strategy and Senior Fiscal Analyst
Ife Finch Floyd Director of Economic Justice
Erin Robinson Director of Outreach and Strategic Campaigns
Jennifer Heron Associate Director of Communications
To get in touch with our team, contact gbpi@gbpi.org
Letter From the President
At a time when Georgia sits on the strongest fiscal foundation in its modern history, the decisions our lawmakers make during legislative session determine whether prosperity is broadly shared among all Georgians or further concentrated among those who have the most wealth.
Georgia’s FY 2026 budget outlines $67.2 billion in planned spending, drawing from a mix of state, federal and agency-raised funds. But beneath the surface of this balanced ledger lies a stark reality. While state revenues have surged, federal investments, especially those that support families with low-incomes, schools and health care are under threat.
One-third of Georgia’s budget, or $22.5 billion, depends on federal funds. These dollars help educate our children, feed families, cover health care for millions and support rural hospitals. Federal cuts to programs like Medicaid, SNAP or child care in the recent budget reconciliation bill (once known as the One Beautiful Bill Act, or OBBA), don’t just reduce line items in Washington. Federal cuts in the reconciliation bill directly threaten the services thousands of Georgians rely on to survive and thrive. The reconciliation bill rewinds decades of efforts to reduce poverty for rural Georgians and has the potential to harm local economies throughout the state. It cuts federal support to parts of Georgia that matter: from families feeding their children and themselves, sick loved ones needing treatment and care, to farmers, family-owned grocery stores and even main street small businesses.
Meanwhile, the state’s growing reserves now nearing $17 billion stand as a striking contrast to the unmet needs in our classrooms, clinics and communities.
Our primer offers a clear-eyed look at how Georgia raises and spends public dollars and the opportunities that exist to use our resources responsibly. It is a call to our state’s leadership rooted in equity, transparency and foresight. With federal aid uncertain and economic headwinds gathering, state leaders must invest— not retreat. Our shared future depends on it.
For over 20 years, GBPI has produced this budget primer to educate Georgians about how the state is using their dollars. The state should be using dollars to support the shared dream to be the best state to live, work and raise a family in. This year, we have expanded our scope to include the impact of federal threats. The threats are real, and the surplus, a resource of one-time funding, would be unable to close an annual gap. Our state is already not meeting the needs of all Georgians and not supporting our shared dream. You can find the proof of this in the pages of our state budget, which we outline here in our Budget Primer.
Count on us at GBPI to continue to deliver on our mission—to advance lasting solutions that expand economic opportunity and well-being for all Georgians. This mission starts with a level-set: where do the economic opportunities for Georgians lie within the state budget. This level-set begins with the budget primer.
Understanding Georgia’s FY 2026 Budget:
Overall, Georgia plans to spend $67.2 billion in Fiscal Year (FY) 2026, which begins on July 1, 2026 and ends on June 30, 2027.
The largest share of the budget comes from $37.8 billion in state revenues, which includes $32.5 billion in state General Funds that can be appropriated freely, $2.5 billion in Motor Fuel Funds that are constitutionally dedicated for infrastructure, $1.7 billion in Lottery Funds that are constitutionally dedicated for Pre-K and higher education scholarships and $957 million in other taxes and fees that are assessed for specific purposes such as provider fees on hospitals and nursing homes for health care.
Georgia’s budget also includes $22.5 billion in federal funds, which help to cover the costs of programs such as Medicaid. For the most part, these federal funds are reserved for specific purposes and guided by eligibility criteria for enrollment in federal programs and services.
Finally, Georgia’s budget includes $7 billion in agency funds raised that fund specific areas, such as tuition for colleges and universities. Outside of the regular appropriations process, intra-state government transfers comprise $5.9 billion in state spending, with most of these funds directed to the State Health Benefit plan to insure state employees and educators.
State Funds Make Up Most of Total $67.2 Billion 2026 Budget
Source: Conference Committee Substitute to HB 68 as signed by the governor, May 2025.
How Does Georgia Raise Revenue?
Georgia raises revenue from personal and corporate income taxes, sales taxes, gas and vehicle taxes and other levies and fees. Income taxes are the cornerstone of Georgia’s revenue system, accounting for half of all state funds. Sales taxes are the second largest revenue source, representing slightly less than a quarter of annual collections. A fair and reliable revenue system requires both types of taxes.
Income taxes help balance the regressive effects of sales taxes and fees by allowing the state to collect a proportionate share of revenue from the wealthiest earners and most profitable corporations. A healthy income tax is also less sensitive to economic trends, which can boost revenue growth during good times but decline sharply when recessions occur.
Sales taxes provide a less consistent source of yearly revenue, and they fall more sharply on middle-class families and people with lower incomes. Georgia also offers broad exemptions from sales taxes for most services, tilting the revenue system in favor of higher earners and counter to trends in other states expanding sales taxes to include services. Still, sales taxes remain a core funding source that allows the state to generate revenue from consumption and economic inputs that would otherwise be exempt from taxation.
In recent years, lawmakers have enacted several measures to ensure sales taxes are applied to online marketplaces and digital downloads. However, the state’s sales tax is not assessed on the purchase of most services and large parts of Georgia’s economy, such as construction labor, the finance industry, attorneys or physicians.
Income Tax Raises About Half of All State Revenue
Source: Governor’s Budget Report Amended FY 2025 and FY 2026; Office of Planning and Budget, May 2025.
Education and Health Care Equal 73% of $37.8 Billion Budget for Fiscal Year (FY) 2026
Source: Conference Committee Substitute to HB 68 as signed by the governor, May 2025.
Major Funding Categories:
General Fund: $32.5 Billion (48% of Georgia’s Budget)
Georgia’s General Fund derives largely from income taxes on personal and corporate earnings and sales taxes on consumer transactions. The state also assesses excise taxes on tobacco and alcohol, along with a variety of other taxes and fees.
The state-funded portions of education, Medicaid and most other traditional state services are paid for through the General Fund.
The remaining General Fund appropriations are directed to state agencies, boards and commissions dedicated to activities such as economic development, agriculture and forestry and grant programs. The General Fund also covers the costs of operating the legislative, judicial and executive branches of state government. Not included in Georgia’s General Fund are dedicated taxes and fees that are collected into several other funds such as those raised by the Lottery and Motor Fuel taxes.
Federal Funds: $22.5 Billion (33%of Georgia’s Budget)
A significant share of Georgia’s overall spending for health care, K-12 education, transportation and other services is paid through the administration of $22.5 billion in federal funds. These federal funds usually are based on enrollment in benefit programs jointly administered by Georgia and the federal government.
Federal rules require the state to pay a share of the cost for Medicaid and other programs and services that benefit Georgians. As a result, changes in corresponding state funding levels can sometimes lead to changes in federal funding. If the federal government changes the eligibility criteria or financial formulas used to calculate funding for public benefit programs, such as Medicaid or SNAP, it can also have a significant corresponding impact on the state budget by changing the cost burden facing the state or the availability of these programs and services for state residents.
Health Care, Public Health and Human Services Equal 67% of $22.5 Billion in Federal Spending for FY 2026
Agency and Research Funds: $7 Billion (10% of Georgia’s Budget)
The $7 billion in revenue includes university system research funds and tuition and fees from colleges. It also includes regulatory fees and revenue raised directly by individual state agencies.
Lottery Funds: $1.7 Billion (4% of Georgia’s Budget)
The $1.7 billion in revenue raised from the state lottery is dedicated to pre-Kindergarten programs and scholarships for higher education.
Motor Fuel Funds: $2.5 Billion (4% of Georgia’s Budget)
Revenue raised from the state’s motor fuel taxes is required by the state constitution to be spent on infrastructure. The money is dedicated to a mix of new construction, maintenance of existing roads and bridges and debt service on past projects. Georgia’s 2025 motor fuel rates are 33.1 cents per gallon of gas and 37.1 cents per gallon of diesel, a slight uptick from last year. While the state tax on aviation gasoline is at one cent per gallon, the state’s Department of Revenue has recognized a permanent tax exemption on the sale of jet fuel, which will cost the state around $68 million in FY 2025. The state budget includes a total of $2.5 billion in dedicated motor fuel revenue.
Tobacco Settlement Funds: $149 Billion (0.2% of Georgia’s Budget)
Georgia receives annual payments in perpetuity from a large settlement signed in 1998 with four of the nation’s largest tobacco companies, known as the Tobacco Master Settlement Agreement. Georgia is not required to dedicate these payments for specific purposes. As a result, the use of tobacco settlement money can vary from year to year, though most of the funds have been allocated to health care.
Most Tobacco Funds Used for Health Services 2025 Tobacco Settlement Fund Budget
Source: Conference Committee Substitute to HB 68 as signed by the governor.
Intrastate Transfers $5.9 Billion
Intrastate transfers involve funds being moved from one area of government to another and primarily include payments from the State Health Benefit Plan (SHBP), which insures about 665,000 state employees, school system employees, retirees and their families. This year, the employer cost of providing health coverage through SHBP—which is paid by the state and public schools—spiked by 7%. Effective immediately for most state employees, the required employer contribution increased by $1,500 per year for each employee, or by $125 per member, per month from $1,760 to $1,885. This increase was driven by several factors, including an aging member population, stagnant subscriber levels and decisions made by state policymakers. Gov. Kemp’s FY 2026 budget proposal passes on this increase in premiums for non-certified school employees to local districts.
Health Payments Make Up Most Intrastate Transfers
Source: Conference Committee Substitute to HB 68 as signed by the governor.
As Georgia Awaits Potential Federal Changes, Opportunities Abound on Horizon
The $37.8 billion state budget signed into law by Gov. Kemp for FY 2026 represents a 4.5% year-over-year increase from the budget signed into law the prior year. With no funding released from Georgia’s overflowing reserve accounts for FY 2026 and the state issuing bonds at the lowest level in modern history, the budget remains well below the state’s capacity to address ongoing needs from health care to public education.
Georgia’s governor holds unilateral authority to set the state’s revenue estimate, which effectively acts to cap spending. Georgia is currently in a cycle in which state revenue collections continue to outpace spending, adding to an already historic level of unobligated reserves available for allocation.
Entering FY 2026, Georgia remains at an inflection point, with a strong level of resources on-hand, along with a currentyear budget that prioritizes one-time spending over recurring investments with bonds. There is a clear opportunity available to state leaders to respond to longstanding needs and new gaps created by federal cuts across public education, access to health care and economic mobility during the 2026 legislative session. Up to this point, outside of limited rebates and paying for capital projects in cash, state leaders have chosen to maintain increasingly large reserves that remain mostly unallocated. However, state leaders have also shown signs of shifting their posture—with Amended Fiscal Year (AFY) 2025 marking the first time the state has released reserves for non-emergency spending. Going forward, Georgia can reach its full potential by wisely investing recurring revenues and responsibly allocating reserves to finance targeted investments.
Mounting Tax Breaks Tilt Georgia’s Revenue System Toward Large Corporations: $11 Billion in Forgone Revenue Collections in FY 2026
Georgia offers a wide array of tax credits, deductions and other tax breaks, also known as tax expenditures, that give preferential treatment to certain taxpayers and corporations. The tax breaks will cost the state more than $11.1 billion in revenue in FY 2026. Some tax breaks provide key protections for families, such as the sales tax exemption on groceries, while others provide credits or incentives to specific industries or special interest groups. Several of Georgia’s largest tax breaks deliver outsized gains to select groups or industries—such as manufacturing, film or insurance—often with questionable benefit to the state or its people.
Georgia lacks a standardized review process to measure and compare the costs and benefits of all existing and proposed tax breaks. During the 2021-2022 session, however, the state enacted legislation that allows the chairs of the General Assembly’s tax-writing committees to request analyses of a limited number of tax expenditures. Senate Bill 366, which was enacted during the 2024 legislative session, tweaked this process and now permits at least 12 economic analyses per year.
Film Industry, Insurance Companies Receive Largest Special-Interest Tax Breaks
Source: Georgia Department of Audits and Accounts, “Georgia Tax Expenditure Report for FY 2025”
State Savings Account Remains Full
The Revenue Shortfall Reserve (RSR), Georgia’s rainy-day fund, provides stability in economic downturns. The fund is like a savings account to pay expenses and maintain services when revenues decline unexpectedly. Maintaining adequate reserve money helps Georgia keep its decades-long streak of maintaining its AAA bond rating, allowing the state to borrow on favorable terms and save millions in interest. Money is not appropriated into the RSR; the balance grows at the end of each fiscal year if there is surplus state revenue (up to 15% of prior year revenue). The governor is also authorized to release for appropriation any amount over the minimum balance required—4% of prior year revenues—in case of a fiscal emergency or as part of the annual state budget. Since the end of FY 2021, Georgia’s Revenue Shortfall Reserve has remained at its maximum level, with consistently conservative revenue estimates (which effectively acts to cap spending) issued by Gov. Kemp resulting in an additional unobligated surplus.
At the close of 2024, Georgia’s Revenue Shortfall Reserve stood at $5.5 billion, equivalent to 15% of prior year revenues, or enough to fund the state’s operations for just over two months.
In FY 2024, Georgia generated revenues that were $901 million above what the state spent, which increased the amount held in unobligated reserves to $11.5 billion and elevated overall state general fund reserves to $17 billion. With $40.6 billion in AFY 2025 spending, Georgia’s budget appropriates roughly $2.7 billion more than the governor’s revenue estimate and is likely to end the year with between $14 billion to $16 billion in General Fund reserves. FY 2025 looks like it will be the first year since FY 2020 that state general fund reserves have trended down.
Georgia Revenue Shortfall Reserve Remains Full for Fourth Consecutive Year
Source: Governor’s Budget Report, AFY 2024 and FY 2025
State Likely to Maintain $9 to $10 Billion in Undesignated Reserves, Following Historic Surpluses in Fiscal Years 2021-2024
Source: Department of Revenue, Comparative Summary of State General Fund Receipts (July 2022 – May 2025); The Governor’s Budget Report, Amended Fiscal Year 2025 and Fiscal Year 2026
State Advances Flat Tax Implementation
House Bill 1437, signed into law by Gov. Kemp in 2022, sets Georgia on a course of personal and corporate income tax rate reductions that will primarily benefit the state’s highest earners. This year, lawmakers accelerated the implementation of HB 1437 and enacted HB 111 (signed by the governor in April) to retroactively reduce the state’s flat corporate and personal income tax rates to 5.19% as of January 2025.
The flat tax plan requires overall revenue growth of at least 3% for the plan to be fully implemented. Unless further action is taken, the state’s income tax rate will be reduced to 5.09% in January 2026 if state revenues meet the benchmarks set under state law.
For Georgia families earning the median income or less, these pending tax changes would offer little to lift incomes or increase economic opportunity. Rather, the changes may redirect resources from programs and services that could otherwise support working families, thus widening disparities across income, race and ethnicity.
Accelerating Flat Tax from 5.39 to 5.19% Offers Few Benefits to Most; Only 13% of $725 Million in Cuts Goes to 60% of Georgia Households
Source: Institute on Taxation and Economic Policy, January 2025; Fiscal note for House Bill 111 (February 6, 2025)
The Department of Early Care and Learning FY 2026 Budget
The Department of Early Care and Learning (DECAL) administers: Childcare and Parent Services (CAPS); the Georgia Pre-kindergarten Program; Nutrition Services, which administers the federal Child and Adult Care Food Program; the Summer Meals program for low-income children in daycare facilities; and Quality Initiatives, which works to improve the quality and accessibility of child care programs.
State general funds support CAPS (child care scholarships that helps families with low -incomes), and state lottery funds support the pre-K Program.
The FY 2026 budget includes $640 million for DECAL, with $77 million going to child care and $563 million to pre-K. This is a 4% increase between FY 2025 and FY 2026.
Even with the 4% budget increase, quality child care is unaffordable for the typical family in most Georgia counties, and it is a greater expense for Black and Latinx families. Meanwhile, the state loses at least $2.52 billion in economic activity annually due to child care challenges, and loses at least $131.7 million in tax revenue. Child care challenges disrupt parents’ workforce participation and reduce earnings, which lowers the family’s purchasing power and tax contributions.
The FY 2026 Budget Includes $640 Million in General Funds and Lottery Funds for DECAL
Source: The Georgia General Assembly’s Conference Committee Substitute to HB 68. The Governor’s Budget Reports.
The Pre-K Budget Continues Progress from Last Year; Child Care Needs More Support
After a historic investment last year, the legislature approved an additional $22 million for pre-K in the FY 2026 budget, including $14 million for year two of the class reduction phase in. Smaller class sizes will allow teachers to give each student more attention.
The FY 2026 budget provides a modest increase to the CAPS program. About $1.5 million in the budget will annualize the 60th percentile provider rate reimbursement originally established in the FY 2025 budget. There is also about $4 million for 500 additional CAPS slots.
The Additional $22 Million in the FY 2026 Budget Builds on the State’s Progress in Georgia’s Pre-K Program
Source: The Georgia General Assembly’s Conference Committee Substitute to HB 68. The Governor’s Budget Reports.
The Legislature’s Modest Increase Makes Little Progress to Meet the Need for Affordable Child Care
Source: The Georgia General Assembly’s Conference Committee Substitute to HB 68. The Governor’s Budget Reports.
These modest investments will not close the more than $170 million gap after Congress failed to extend federal funding for child care in 2024. The additional federal funding provided more than 22,000 CAPS scholarships and enhancements to support providers. DECAL is rolling back those expansions with more restrictive policy changes. For example, the agency reduced the initial income eligibility level from 50% of the state median income ($52,947 for a family of four) to 30% of the state median income ($31,768 for a family of four), the lowest in the country. This and other changes aim to reduce the number of children receiving CAPS scholarships.
The Department of Education FY 2026 Budget
The Department of Education serves over 1.7 million students and provides resources to Georgia’s 2,300 public schools. In FY 2026, it is set to receive $13.7 billion, or 36% of the state appropriations.
FY 2026 Department of Education Budget highlights:
• $910 million decrease for Quality Basic Education (QBE) Equalization Grants, which provide additional financial assistance to local school systems that rank below the statewide average of per-pupil tax wealth
• $6 million increase in QBE formula funds for Sparsity Grants to help smaller districts pay fixed overhead costs
• $2.9 billion decrease for Local Five Mill Share (LFMS)— a standard deduction from the total QBE earnings. Local school districts are required to cover at least LFMS in property taxes
• $20 million increase to replace 227 school buses
• $15 million one-time pilot funds to school districts for economically disadvantaged students; previously Georgia was only 1 of 6 states that did not provide support for students living in poverty
• $50 million for student support services, including mental health grants to help with counselor referrals and funds that help ensure that all schools, regardless of size, can have a social worker
Public Funds for Private Institutions
Vouchers defund public schools in two ways. First, they use state public education funds for private institutions. Second, they decrease public school enrollment. This results in a decrease in funding to school districts because state dollars for public schools are based on enrollment. This year, the Georgia General Assembly budgeted $141 million in public funds for the state’s latest voucher program, the Georgia Promise Scholarship (GPS). These funds help eligible students and families pay for private school tuition through $6,500 vouchers. In the first three weeks, the Georgia Student Finance Commission received over 7,400 applications and will potentially fund over 21,000 vouchers to eligible students. There are over 1.7 million students in the state of Georgia.
The GPS is one of three voucher programs and diverts 1% of QBE funds ($141 million) to private schools. Vouchers like GPS make it difficult for schools to handle more fixed costs (operation and maintenance, interest on debt, payments to state and local governments), as school enrollments decline. In 2008-2021, a total of $1.3 billion was diverted by Georgia’s voucher programs even while Georgia underfunded the QBE formula during 20032018.
The impact of vouchers can also be roughly measured through “fiscal externality,” a measure of how much per pupil funds are reduced because of an enrollment drop. In the first year of GPS, assuming that about 20% of students who obtain a GPS voucher are public school students who leave to attend private schools, school districts will have to spend between $12 and $61 more per each student who remains to continue to maintain the same level of services, like classroom instruction, that public school students received before voucher students left. Averaged across all Georgia students, the GPS could cost $30 more per student to maintain the same level of services.
Tax Caps Limit School Funding
In Georgia, local boards of education are authorized to impose a tax of at least five dollars on every $1,000 of taxable property value. This is known Local Five Mill Share — and is the required local effort to support local public schools. Local property taxes account for approximately 37% of total public school funding in Georgia in FY 2022. That funding will likely be reduced by a recent statewide property tax policy, HB 581, that caps the annual assessment increase for property taxes at the rate of inflation. For example, if inflation is 2%, the maximum increase in a home’s assessed value would also be 2%. In Georgia, homeowners pay property taxes based on their home’s value, which is determined by their county assessor. School districts can opt out of this property tax cap which would allow districts leaders to have more flexibility and local control to levy additional taxes for public school funding. Many large school districts have opted out, as of March 1, approximately 120 school systems have taken this action. After the passage of HB 92, school districts will have until March 1, 2030, to confirm their decision to cap property taxes.
The University System of Georgia/Board of Regents FY 2026 Budget
Georgia’s four-year public higher education system, the University System of Georgia (USG), is composed of 26 higher education institutions located across the state. USG also encompasses the Georgia Public Library Service, which manages 61 libraries; and the Georgia Archives, which collects and preserves records and information about Georgia.
The overall FY 2026 is $10.2 billion and contains $2 billion in federal funding. The state portion of the USG budget is $3.6 billion, up from $3.4 billion in FY 2025. State general funds of $3.3 billion were allocated to USG’s 26 colleges and universities for student instruction and support services like academic advisement. This FY 2026 allocation to USG’s 26 institutions increased by 7% from FY 2025.
FY 2026 USG Teaching Budget highlights:
• $170 million increase for a 2.7% growth in enrollment and a corresponding increase in campus square footage
• $11 million increase for the employer contribution rate to the Teachers Retirement System (TRS) moving from 20.78% to 21.91%
• $19 million increase for the employers’ share of health benefits
Tuition and Fee Rate Updates
The USG uses an appropriation funding formula that is designed to compute funds needed to cover the costs of educating students. The formula is primarily based on student enrollment.
Georgia ranks third lowest in the south and sixth lowest in the nation for average tuition and fees. This year the USG in-state tuition rates in the 2025-26 academic year are set to remain flat for most institutions, although out-of-state tuition will increase by 2%, and out-of-country tuition is set to rise by 3%.
University System of Georgia’s Lack of Investment in Public Higher Education
Since 2002, the USG has failed to pay its original share (75%) of the state USG budget under the public higher education funding formula. In FY 2025, the Georgia state appropriation was 19% less, totaling only 56% of the state USG budget. This means that students must support the remainder, or 44%, through their tuition and fees.
Georgia’s continuing disinvestment in public higher education reflects national trends of decreasing state spending per student, even while enrollment nationally has increased over the last 25 years. State investment helps mitigate financial barriers, reduce student loan debt and increase postsecondary degree attainment. State appropriations also decrease time to degree among students at four-year colleges and boost the transfer rate of two-year college students to four-year institutions.
The University System of Georgia Has Not Contributed Fully to the Higher Education Funding Formula Since 2002
Source: GBPI Analysis of the University System of Georgia Data, Fall 2025 Percentage of State’s Share of Funding Formula
The Technical College System of Georgia FY 2026 Budget
The Technical College System of Georgia (TCSG) includes 22 colleges and 88 campuses providing technical and core academic education.
The FY 2026 budget for TCSG is $538 million. Approximately $444 million has been reserved for technical education, which provides funding for continuing education or training for youth and adult learners and helps support workforce development. The rest of the budget has been allocated for Adult Education programs that cater to individuals without a high school diploma, and business initiatives that encourage job creation.
FY 2026 Technical Education Budget highlights:
• $331,885 increase to reflect the Teachers Retirement System (TRS) employer contribution rate increase from 20.78% to 21.91.7%
• $33 million increase to reflect a 10.6% enrollment increase (last year, $9 million was added to reflect a 3% increase in enrollment)
FY 2024 Technical College System Full-Time Equivalent (FTE) Enrollment and Funding Largely Remain Flat for a Decade
Source: Georgia’s AFY budgets 2014 to 2024. State general funds for technical education only. Technical College System of Georgia, End of Year annual Academic Year Enrollment Reports.
Education Lottery Reserves
The Lottery for Education account is required to maintain a minimum balance, called the shortfall reserve, of 50% of the previous year’s net lottery proceeds. If lottery ticket sales underperform, the state can draw on this reserve to fund the Helping Outstanding Pupils Educational (HOPE) scholarship program. Once the 50% level is reached, additional reserves are unrestricted. In FY2024, total education lottery reserves were $2.4 billion, with a $779 million required shortfall reserve and $1.6 billion in unrestricted reserves.
The Education Lottery Reserves Totaled $2.4 Billion, with $1.6 Billion in Unrestricted Reserves
Source: State Accounting Office-Georgia Revenues and Reserves Report, 2024
The College Completion Grants Program
The College Completion Grants are micro-grants awarded to students who qualify for financial support to finish their postsecondary education. Four-year and two-year college students who are Georgia residents and completed at least 80% of their degree program could receive up to $2,500 in College Completion Grants. In the 2025 Legislative Session, House Bill 38 passed to decrease the degree completion threshold from 80% to 70% for four-year programs and from 80% to 45% for two-year programs which will expand access to College Completion Grants to more students. HB 38 also extends the College Completion policy sunset year from 2025 to 2029. The College Completion Grants budget remains flat at $10 million for FY 2025.
Across the state of Georgia, 78 eligible Georgia post-secondary institutions received College Completion Grants funds.
Georgia’s 2026 Health Budget
The Departments of Behavioral Health and Developmental Disabilities (DBHDD), Community Health (DCH) and Public Health (DPH) are the primary agencies focused on the state’s health care and public health systems. Georgia plans to provide almost $7.7 billion in state funds for these three agencies. General fund appropriations account for $6.9 billion, or about 90%, of their state funding. Other sources, like Tobacco Settlement Funds, account for the remaining $799 million in state funds. Overall, state funds for these three agencies increased by $353 million, or 5%, from the original FY 2025 budget.
The Department of Community Health (DCH) accounts for about $5.6 billion, or 72%, of state health spending. The Department of Behavioral Health and Developmental Disabilities (DBHDD) accounts for about $1.7 billion, or 22%, of state spending on health. The Department of Public Health (DPH) accounts for $435 million, or about 6%, of state spending on health.
State Health Spending by Agency, FY 2026
Source: Georgia’s 2026 Fiscal Year Budget (HB 68)
The Department of Community Health FY 2026 Budget
The Department of Community Health (DCH) administers the state’s health care safety net, reimburses hospitals for services provided to uninsured and underinsured Georgians, manages health insurance coverage for state and school system employees and regulates health and long-term care facilities. The FY 2026 budget provides the Department with almost $5.6 billion in state funds. That includes almost $4.8 billion in state general funds and about $756 million in Tobacco Settlement Funds, ambulance provider fees, nursing home provider fees and hospital provider fees. The budget increases the Department’s state funding by $291 million, or less than 6%, above the original FY 2025 budget.
About 94% of the Department of Community Health’s overall state funding is earmarked for Medicaid and PeachCare, which provide health care coverage to about 2 million Georgians with lower incomes. Although most enrollees are children under the age of 19, more than half (55%) of FY 2025 state funds for Medicaid and PeachCare support coverage for older adults and individuals with disabilities.
Over Half of State Medicaid/PeachCare Funding Covers Healthcare Costs for Older Adults and Individuals with Disabilities
Source: Georgia’s 2026 Fiscal Year Budget (HB 68):
Modest Increases Improve Medicaid Provider Rates and Set Course for Eligibility and Enrollment System Improvements, But Health Insurance Coverage Gap Remains
Increasing Provider Rates
Increasing Medicaid reimbursement rates, which tend to be lower than Medicare and commercial rates, can improve access to care. The Department of Community Health (DCH) FY 2026 budget includes about $23 million in additional state funds to support provider rates increases. The largest line items impact provider rates for emergency medical transportation, therapy for children with autism, newborn deliveries in rural counties and primary care.
Strengthening Eligibility and Enrollment Infrastructure
The unwinding of pandemic-era Medicaid continuous eligibility and the launch of Georgia’s Pathways to Coverage program highlighted and exacerbated longstanding weaknesses in the state’s eligibility and enrollment infrastructure. Georgia’s outdated technology can create issues for both enrollees and state agency workers that prevent eligible Georgians from accessing coverage and generate unnecessary state costs. The AFY 2025 budget included $35 million (and forecasts the allocation of another $35 million in a future budget cycle) for the Georgia Technology Authority that will support activities overseen by DCH to replace the current system, known as Gateway. This modernization effort represents an important step toward simplifying application, enrollment and renewal processes for Medicaid and other public benefits programs.
Continuing to Invest in the Pathways to Coverage program
Despite having one of the highest uninsured rates in the country, Georgia is 1 of 10 states that have not fully closed the health insurance coverage gap. Georgia’s FY 2026 budget for the Department of Community Health reflects a continued investment in the Pathways to Coverage program, which provides Medicaid coverage to low-income, uninsured adults contingent upon reporting 80 hours per month of work, higher education, volunteering or some other qualifying activity. Although an estimated 240,000 are potentially eligible for the program, Pathways to Coverage will only cover about 30,000 Georgians at full implementation (according to the state’s 1115 demonstration waiver extension application). Because Pathways to Coverage does not qualify for the enhanced 90% federal match for states who expand coverage of adults earning up to 138% of the federal poverty level, Georgia is paying more per person and missing out on downstream economic benefits, including between $112$285 million in additional state revenue as estimated by the state auditor.
The Department of Public Health FY 2026 Budget
The Department of Public Health (DPH) operates programs focused on disease and injury prevention, health promotion and health-related disaster response and preparedness. The FY 2026 budget provides the Department with about $435 million in state funds. That includes almost $403 million in state general funds and almost $14 million in Tobacco Settlement Funds. Also included is about $18 million in combined Brain & Spinal Injury Trust Funds and Trauma Care Trust Funds for attached agencies.
The budget increases the Department’s state funding by about $3 million, or less than 1%, above the original FY 2025 budget. Much of this increase is accounted for by an increase for the perinatal home-visiting pilot project that was launched in FY2024 and will expand to provide support to pregnant women and their infants in 75 rural counties. The largest state-funded programs support 159 county health departments, provide services for children and help track and prevent the spread of infectious diseases.
About Half of DPH’s State Funding Goes to County Health Departments
Source: Georgia’s 2026 Fiscal Year Budget (HB 68) *Excludes state spending on attached agencies
The Department of Behavioral Health and Developmental Disabilities FY 2026 Budget
The Department of Behavioral Health and Developmental Disabilities (DBHDD) provides services primarily for uninsured and underinsured Georgians living with mental health conditions, substance use disorders and developmental disabilities. It operates state hospitals and provides community-based services through contracted providers. The Department also operates forensic evaluation and treatment programs under the court system’s jurisdiction. The FY 2026 budget provides the Department with over $1.7 billion in state funds. That includes almost $1.7 billion in state general funds and about $10 million in tobacco settlement funds.
The FY 2026 budget increases the Department’s state funding by about $59 million, or less than 4%, above the original FY 2025 budget. Much of this increase is accounted for by reimbursement rates increases originally added in the FY 2025 budget. The FY 2026 budget annualizes reimbursement rate increases for providers who serve individuals with intellectual and developmental disabilities in their homes and communities and for providers who deliver community-based preventive or rehabilitative services to individuals with mental health issues or substance use disorders. Overall, the largest state-funded programs fund evaluation and treatment as well as both institutional and community-based care for children, adolescents and adults with either mental health issues or disabilities.
About Three-Fourths of DBHDD’s State Funding Goes to Mental Health and Developmental Disabilities Services*
Source: Georgia’s 2026 Fiscal Year Budget (HB 68) *Excludes state spending on attached agencies
Federal Funds Support Critical Health Programs
Federal funds account for a substantial proportion of each health agency budget. The three primary health agencies expect to receive almost $14 billion in combined federal support in FY 2026 – most of which is accounted for by the federal matching funds for Medicaid. The Department of Health and Human Services (HHS) is the largest federal funding source for both DBHDD and DCH. Special Supplemental Nutrition Program for Women, Infants, and Children (also known as WIC) funding from the U.S. Department of Agriculture is one of the largest federal funding sources for the Department of Public Health along with other large grants from HHS. Among other programs, federal funds play an outsized role in:
• Healthcare coverage for low-income Georgians
• Community-based services for adults with intellectual and/or developmental disabilities
• Substance abuse prevention services
• Public health programs for infants and children, like early intervention services and nutrition support, and for emergency preparedness
Source: Georgia’s 2026 Fiscal Year Budget (HB 68)
The Georgia Department of Labor FY 2026 Budget
The Georgia Department of Labor (DOL) is an agency tasked with providing employment services for businesses and workers, workforce data and maintaining an Unemployment Insurance (UI) system.
The FY 2026 DOL budget is about $8.9 million, a $352,000, a 4% increase from FY 2025. State leaders rejected the agency’s requests for additional resources for modernizing DOL’s UI system.
The state’s low modernization investments are reflected in the DOL’s performance. In the first quarter of 2025, DOL processed first UI payments of about 74% of Georgia workers within 21 days, below the 87% federal standard.
As of early January 2025, the state’s UI Trust Fund reserve held $1.8 billion, below the federally recommended level of $3.2 billion. The time to replenish the Trust Fund is now, when UI claims are low. UI claims may accelerate in the near term due to federal budget cuts and tariffs.
As of Early 2025, Relatively Low Unemployment Helped Maintain Low Levels of GA Workers Seeking UI Protections
Source: GBPI Analysis of DOL Weekly Claims data.
The Department of Human Services FY 2026 Budget
The Department of Human Services (DHS) oversees various functions, like foster care, child welfare, support for low-income individuals and child support. The General Assembly included about $1.1 billion in the FY 2026 budget for DHS. This is 3% more for DHS than the FY 2025 budget.
Georgia spends more than 60% of its DHS budget on child welfare, foster care and adoption services, but only 15% on Low Income Family Support programs, which include the administration of programs like cash and nutrition assistance.
Foster Care, Adoptions and Child Welfare Services are 63% of the DHS Budget
Note: Attached agencies include the Georgia Rehabilitation Agency, Family Connection, Safe Harbor for Sexually Exploited Children Fund Commission
Source: Georgia’s 2026 Fiscal Year Budget (HB 68)
FY 2026 Department of Human Services Budget highlights:
• A $1.7 million increase for child welfare services for Court Appointed Special Advocates to replace federal funds deemed ineligible by the US Department of Health and Human Services
• $19.3 million for foster care for the growing costs of caring for children with complex needs
• $6.1 million for a 2% provider rate increase for group homes and foster parents
• $5.8 million for a $3,000 pay increase for Division of Family and Children Services (DFCS) eligibility workers
A Much-needed Pay Increase
Pay is one key component to retaining and growing staff, issues with which the agency has long struggled. Legislators this session approved a $3,000 pay bump for the DHS’ Division of Family and Children Services (DFCS) eligibility workers. This increases entry-level pay from $35,360 to $38,360, which will help retain a stable workforce and improve access to public benefits.
Federal Funding for the Department of Human Services
Federal funding comprises 55% of DHS’ budget. It includes Temporary Assistance for Needy Families, the Supplemental Nutrition Assistance Programs (SNAP), Medicaid, Foster Care Title IV-E, Community Services Block Grant (CSBG) and the Low Income Home Energy Assistance Program (LIHEAP). Many of those programs have been named in Congressional proposals for federal cuts this year. SNAP and Medicaid could likely be cut by hundreds of billions of dollars nationally. Other proposals have suggested completely eliminating CSBG and LIHEAP.
TANF and Medicaid make up more than a fifth of DHS’ budget and fund child welfare services, foster care and adoption services, elder care services and the TANF cash assistance program. They also support the agency’s administration.
Proposed cuts to key federal programs could cut millions of federal dollars from Georgia’s DHS budget
Note: SNAP administrative funding is not separated out in the budget
Source: Georgia’s 2026 Fiscal Year Budget (HB 68)
The Georgia Department of Corrections FY 2026 Budget
The Georgia Department of Corrections operates Georgia’s prison system. Over 50,000 people are living under carceral control in this system. The Georgia General Assembly approved a $1.7 billion FY 2026 GDC budget, an increase of 13% over the FY 2025 budget.
FY 2026 Department of Corrections Budget highlights:
• $50 million to support new infrastructure projects, technology and security improvements
• $44 million to provide salary increases and make job promotion system changes
• $43 million to boost marketing, training and workforce retention efforts
• $31 million to expand prison health contracts for mental, dental, physical and pharmacy services
The FY 2026 Budget Addresses Some Concerns but Ignores Others
The budget does not do enough to address the critical concerns related to the safety and well-being of correctional staff and people who are incarcerated. For example, despite more than $31 million in added prison health contracts to match a rising prison population, there is no spending added to help address unaffordable prison health co-pays that often limit incarcerated Georgians’ ability to access preventative care.
In Georgia, the number of individuals in GDC prisons is increasing again from a low of 46,000 during the pandemic to more than 50,000 in April 2025.
