The Saga of Georgia's FY2027 Budget

For much of this legislative session, there was a great deal of uncertainty about what the budget would look like, and significant changes were made at the very end of the process. On May 12, 2026 Governor Kemp signed his last state budget into law, and with it, he disregarded almost $300 million in funds appropriated by the Georgia General Assembly. About a third of these funds were related to healthcare, including almost $6 million appropriated for a 10% increase to 32 key dental codes. The session included several ups and downs that led to this moment, and choices made in the last several months will impact future dental advocacy efforts.  

A Balanced Budget 

With the passage of the One Big Beautiful Bill Act in July of 2025, concerns about its effects immediately began to proliferate among Georgia policymakers. Not long after its passage, Governor Kemp directed state agencies to hold the line on spending by limiting increases for the upcoming budget year and preparing contingency plans for potential losses in federal funding. At the time, it appeared that revenue projections were sufficient to meet future spending requirements. 

Georgia officials emphasized a focus on fiscal responsibility, but throughout the fall, the language of fiscal responsibility blended unevenly with communications from a Senate study committee investigating the elimination of Georgia’s income tax. The committee’s final recommendation focused on raising the standard deduction, exempting the first $50 thousand in income for individuals, and implementing a stepwise approach aimed at reducing personal income tax rates to zero by 2032.  

Differing Visions for the Future of Georgia Taxes 

As the session began, Georgia representatives returned their attention to a multi-year effort to lower Georgia’s property taxes. Meanwhile, the Senate began to work on several bills aimed at reducing the income tax. These different focal points occupied quite a bit of attention throughout the spring. 

Simultaneously, routine asks targeted at increasing expenditures continued. Each year, advocates petition the legislature for funding. GDA’s AFY 2026 advocacy efforts resulted in $150,000 in grant funding for Georgia Mission of Mercy and the creation of a new grant for rural health education clinics totaling $3.2 million. For FY 2027, GDA sought increases to fee-for-service list prices for 32 key codes. At Crossover Day, GDA’s legislative champions made sure these 32 codes were slated to be increased by 20% which is about $12 million in state funds. Currently, Medicaid reimbursement to dentists is around 38.8% of average charges, well below the cost of providing care.  

Down to the Wire 

At the end of session, the House and Senate’s competing revenue priorities ultimately came to a head, and they came to a compromise of sorts, sending both an income tax bill and a property tax bill to the Governor’s desk. An FY 2027 budget was passed on April 2, 2026, the day before Sine Die. The budget passed in April was set by a revenue estimate of $38.5 billion from all sources of funding. Negotiations between House and Senate members resulted in a final budget that reduced dental code reimbursement increases to 10%.  

The Governor’s Decisions 

Ultimately, the Governor signed tax reductions into law. HB 463 raised the standard deduction to $15,000 for individuals and cut the income tax rate from 5.19% to 4.99%. The bill also provided for a schedule that would reduce income tax rates by 0.125% annually, down to a minimum of 3.99%, provided certain revenue-related criteria are met. A fiscal note from February analyzing an earlier version of HB 463 projected a revenue decrease of close to $1.3 billion in FY 2027 as a result of recommended income tax reductions. The governor also signed SB 33 which created a Local Homestead Option Sales Tax (LHOST) which could be used to fund reductions in property taxes.  

The Governor did not sign the FY 2027 budget until May 12, 2026. The decision to sign HB 463 altered revenue projections for FY 2027, and a projected $1.3 billion shortfall became the primary reason for instructions to state agencies to disregard $300 million in new spending. About a third of these disregards were health related in nature. Expenditures authorized by the General Assembly for dental, primary care, autism services, air ambulances, psychiatric care, nursing homes, cancer care, and rural emergency services were all cut. In his statement about the FY 2027 budget, he indicated that state reserves could still be required to meet potential revenue shortfalls.  

Government Spending and Georgia Dentists 

Georgia’s budget underpins quite a bit of policy designed to enhance the delivery of care in the state. Georgia covers over 2 million people through Medicaid and CHIP. It provides dental care through the Department of Public Health, supports charitable dental care initiatives, and provides funds to support the education of dental professionals. Other budget items of note include rural student loan reimbursement and tax credits for dentists meeting specific criteria. As such, the state budget has a significant influence on dentistry in Georgia.  

Medicaid’s dental benefits are Georgia’s biggest dental related budget line item. The value of Georgia’s average Medicaid reimbursement benchmarked against average charges will continue to decline thanks to persistent inflation and lagging increases in Medicaid reimbursement rates (Figure 1). Currently, Georgia’s reimbursement is the third state from the bottom in the Greater Southeastern United States. Even with an across-the-board 2.5% increase in FY 2026, the purchasing power of Georgia Medicaid has barely budged in the past year. 

The delay in improving reimbursement will widen the already-substantial gap between what Georgia pays and the cost of providing care. Economic hurdles to treating Medicaid patients will grow, further limiting the supply of care available. Currently, only 35.5% of Georgia’s children on Medicaid with a caries related ED visit see a dentist within 30 days of discharge. The percentage of children within that 30-day window declined from 2016 to 2022, the latest year measured by the Dental Quality Alliance. Nationally, average 30-day follow-up went from 41.2% to 45.8%.  

Several states have committed to major enhancements in dental reimbursement over the past several years. Missouri and Ohio made headlines for huge jumps, but even in the Southeastern United States, states such as Mississippi and Louisiana made major investments in updating reimbursement rates (Figure 1). Louisiana has even explored adding incentives for dentists who meet certain quality metrics. Georgia is due for a similar increase. To climb to a level similar to Mississippi and Louisiana would require a substantial investment exceeding $150 million in state and federal funds.  

Georgia’s upcoming budgets will buy less, and competition for newly limited revenue will rise. Revenue projections indicate continued nominal growth even with HB 563 signed into law; however, the structure of the law, with its scheduled reductions, slows that revenue growth compared with prior tax policy. The result will be fewer new dollars to allocate in upcoming state budgets. The purchasing power of each new dollar will also decrease as time moves on. 

Looking to the Future 

New initiatives will require advocacy efforts that take Georgia’s revenue trajectory into account. Evidence of return on investment will become increasingly important to help justify maintaining existing spending and implementing new spending. The change in revenue trajectory also comes with a change in leadership. Come spring of 2027, Georgia will have a new governor, and key leadership positions in the House and Senate will have new faces.  

When it comes to advocating for the dental profession, dentists are best. Every legislator has a dentist. If they do not, GDA tries to find them one. Dentists know dentistry, and their stories provide evidence of the individual and communal benefits of dental care in a way that no table, graph, or dry statistical speech ever will. Next year’s session will require dental expertise.  

GDA offers multiple opportunities to join advocacy efforts. To get involved and directly advocate on behalf of the dental profession, join GDA’s Contact Dentist Network. Donations to GDAPAC are the financial foundation of advocacy. And don’t forget to attend GDA’s district legislative receptions and LAW DAY 2027.