Retired state employees were among the biggest losers when Gov. Brian Kemp used his veto pen to trim spending in Georgia’s new budget.
The governor cut $100 million that was supposed to guarantee more robust cost-of-living raises for retired state workers after more than a decade of stagnant benefits. While retirees will still get a 2.25% cost-of-living adjustment in July, their representatives say it won’t be enough to keep up with inflation and that future raises will be smaller than they could have been.
“A good chunk of the General Assembly said they wanted to help us. This year, it seemed like it was all coming to fruition,” said Chuck Freedman, legislative liaison for the Georgia State Retirees Association. “And then the door just got slammed shut in our faces.”
A spokesperson for Kemp noted the state has spent more than $1.1 billion over the last three years to shore up the Employees’ Retirement System of Georgia. And the 2027 budget Kemp signed last week still includes $27.8 million for a one-time supplemental payment for retirees.
“Retirees know (the governor) has fought hard for them,” Kemp communications director Andrew Isenhour wrote on social media last week.
The vetoed money is just part of the more than $300 million in state spending Kemp blocked to help pay for a significant income tax cut lawmakers passed on the final day of the legislative session.
Kemp said that tax cut created a $1.3 billion deficit. It lowers the individual income tax rate while raising the amount of nontaxable income for everyone by 25%. It also temporarily exempts some income from overtime and tips from taxation.
Among the other spending he cut was $30.7 million for school transportation, $12 million for school safety equipment grants, $5.3 million for Medicaid dental care and $2.5 million to aid homeless veterans.
“We’re taking all of this out of the budget so that Republicans can say ‘we gave you a tax cut,’” said House Minority Leader Carolyn Hugley, D-Columbus. “But at what cost?”
Kemp’s veto of the money for retirees has received less attention. But many of the state’s 56,000 retirees noticed. They’ve complained for years about the state’s lack of support for the retirement system.
Freedman said Georgia used to provide 3% cost-of-living raises to retirees each year. He said good retirement benefits helped the state to attract employees who otherwise could make more money in the private sector.
But those raises disappeared following the Great Recession. Retirees received no raises for 13 years. While state retirees received some additional one-time payments in six of those years, they didn’t get another bump in their base benefits until 2023. They have since received several small increases.
Like most states, Georgia’s budget has been buoyed by massive budget surpluses in the years after the COVID-19 pandemic. Kemp and the Republican-controlled state Legislature have sent a lot of that money back to taxpayers, both with one-time rebates and lowering the income tax rate.
They’ve also made two $500 million payments to the Employees’ Retirement System of Georgia in recent years, plus another $100 million in the amended fiscal year 2026 budget they approved this year. As a result, the system’s board approved the upcoming 2.25% cost-of-living adjustment last month.
That will give the average retiree an extra $49 a month.
The additional $100 million in the 2027 budget — about $72 million in state funding, with the rest coming from federal and other sources — was intended to boost future retiree raises on an ongoing basis.
Freedman said he appreciates what Kemp and legislators have done to bolster retirement benefits in recent years. But he said retirees are having a hard time paying for basic expenses like food and medical care, even before the most recent bout of inflation.
“We’re, frankly, dismayed and saddened at the loss this represents,” he said.
Jim Potvin, executive director of the Employees’ Retirement System of Georgia, said he’s heartened by the support that lawmakers and Kemp have given retirees in recent years. He said that bodes well for the possibility of future funding.
“I go into the next session with a sense of optimism,” Potvin said.
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