LISTEN: Budget week began with the economic forecast in the capitol, with virtual remarks from Brian Kemp from Davos, Switzerland. GPB's Sarah Kallis reports.

A view of the back of the Georgia State Capitol in Downtown Atlanta in an undated photo.

Lawmakers heard from Gov. Brian Kemp and state agencies during the first day of budget week.

Credit: GPB News

State economist Bob Bushman gave a financial forecast for Georgia on the first day of the Legislature’s budget hearings.

Bushman told lawmakers the state could see a mild recession based on several economic indicators, including a decline in sales tax revenue. Georgians are predicted to increase their spending on services, which the state does not collect tax on, and decrease spending on goods.

“As of December, the probability of recession by the end of this year is about 63%, according to this model," he said. "A mild recession is more likely than not beginning in the first half of this year.”

Bushman noted that some economists at Georgia State University and University of Georgia disagree.

Meanwhile, Georgia maintains a multi-billion dollar budget surplus. 

Gov. Brian Kemp joined the hearing virtually from an economic conference in Davos, Switzerland. He walked lawmakers through the highlights of his proposed budget, including $2 billion in infrastructure spending and a proposed tax cut. 

"I'm proposing that we accelerate that tax reduction by an additional 10 basis points, lowering our income tax rate from 5.75% to 5.39% this year," he said. "This 36-point basis — or 36-basis-point reduction — will save taxpayers nearly $1 billion every year beginning this month." 

Lawmakers will continue to hear budget requests from state agencies throughout the week before writing the budget into a bill. 

Tags: Georgia  Georgia Politics  budget  Recession  Legislature