Georgia governor proposes a return to bond market

After a three-year hiatus, Georgia could return to the bond market this summer, as Gov. Brian Kemp in his proposed fiscal year 2027 budget includes a request for $653.7 million of general obligation bonds.

The proposal comes as part of a proposed $38.5 billion general fund budget that would lower the individual income tax rate to 4.99% from the current 5.19%. The bonds would have final maturities from five to 20 years.

The state sold $880.9 million of general obligation bonds, which were priced in June 2023 and closed on July 12, 2023.

"The cash-funding of capital projects we began in fiscal year 2024 has allowed us to reduce outstanding debt by over 20% in just three years and the ratio of our state's debt service to revenues is just 3%, the lowest since the state began issuing debt bonds in the 1970s," Kemp said in his State of the State speech last week.

The governor's budget would reduce the state's budget surplus and rainy-day fund, bringing the combined total down to $10 billion from $14.6 billion.

The budget now goes to the legislature, which will submit its plan to the governor.