State Savings Account Remains Full as Georgians Struggle

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 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 percent of prior year revenue). The governor is also authorized to release for appropriation any amount over the minimum balance required—4 percent of prior year revenues—in case of a fiscal emergency or if tax collections have outpaced estimates. Since the end of FY 2021, Georgia’s Revenue Shortfall Reserve has remained at its maximum level, with consistently conservative revenue estimates issued by Gov. Kemp also resulting in an additional unobligated surplus.

At the close of 2023, Georgia’s Revenue Shortfall Reserve stood at an estimated $5.2 billion, equivalent to 15 percent of prior year revenues, or enough to fund the state’s operations for approximately 75 days.

Georgia finished FY 2021 with approximately $3.8 billion in unspent revenue, filling its rainy day fund to 15 percent for the first time ($4.3 billion), and designating the remaining $2.3 billion as ‘undesignated surplus.’ At the conclusion of FY 2022, $6.7 billion in unspent revenues were distributed to grow the state’s RSR to $5.2 billion and increase the amount in undesignated surplus accounts to nearly $7 billion. GBPI estimates that Georgia will generate revenues in excess of $5 billion above what the state spends in FY 2023, which is likely to increase the amount held in unobligated reserves north of $11 billion and to raise overall state reserves above $16 billion.

Georgia Revenue Shortfall Reserve Remains Full For Third Consecutive Year

Source: Governor’s Budget Report, AFY 2023 and FY 2024; *GBPI estimate calculated from the Comparative Summary of State General Fund Receipts, May 2023, Georgia Department of Revenue.

State Likely to Continue Trend of Adding Billions to Reserves in FY 2023, Following Historic Surpluses in FY 2021 and 2022

Total net taxes (Dept.of Revenue)

End of year net balance to be added to RSR/unobligated surplus

Total state funds

Revenue Shortfall Reserve

Unobligated Surplus

Source: Department of Revenue, Comparative Summary of State General Fund Receipts (July 2022 – April 2023); The Governor’s Budget Report, Amended Fiscal Year 2023 and Fiscal Year 2024.