(The Center Square) – Georgia Senate Appropriations Chairman Blake Tillery ended his presentation fiscal year 2026 budget Friday by telling his colleagues the state income tax could be eliminated.

The state’s northern and southern neighbors, Tennessee and Florida, do not impose one.

Georgia makes about $16 billion annually from income taxes, Tillery said.

“We can take that to zero,” said Tillery, R-Vidalia. “But we have to decide what we want to otherwise exempt, first.”

Georgia does not tax things that other states do, including labor services. Taxing services could bring in $12.2 billion, which could “almost eliminate the income tax overnight,” Tillery said.

Lawmakers agreed to a bill earlier in the session that would reduce the state’s flat income tax rate from 5.29% to 5.19% for the 2025 tax year. The state is reducing the number by 0.1% until it reaches 4.99%.

The Senate’s $37.7 billion budget removes bond packages and $80 million in corrections funding added by the House. Tillery said the Senate version would use cash to fund some of the projects but would delay two. The House of Representatives proposed $321 million in bonds.

The spending plan includes $170 million for the Department of Corrections, which is less than the $250 million proposed by the House but more than Gov. Brian Kemp’s $125 million. Part of the money will go toward salary enhancements for state prison workers and an additional 700 corrections offices.

The Senate included $141 million for the Georgia Promise Scholarship, the state’s school choice program that begins with the 2025-2025 school year. The House recommended $45.6 million.

The back-and-forth over $7 million for the World Congress Center continued, with Senate budget writers removing it for a second time. The money was included in the state’s mid-year budget but was taken out, only to have the House add it back into its FY26 budget. The money would have been used to prepare for upcoming sporting events in Atlanta. Tillery said the money was removed this time for the same reason it was in the mid-year budget.

“Super Bowl 62 is three years away, the NCAA Final Four for 2031 is six years away,” Tillery said. “If we’re going to fund those now, we would allow those entities to hold the interest on state funds. Why would we not hold those $7 million and interest in state funds?”

The Senate and House will appoint conference committees to hammer out the differences in the versions. The General Assembly will end its 2025 session on Friday of next week.