Executive Summary
The 2026 Georgia legislative session concluded as a net positive for the nonprofit sector, supporting economic stability and sustaining service capacity, even as longer-term pressures remain.
State budgets were the strongest positive: The amended FY 2026 budget stabilized critical systems like child welfare, while the FY 2027 budget expands investment in Medicaid, foster care, early childhood, literacy, and food access – including SUN Bucks, which is expected to draw down over $100 million in federal benefits. Together, these investments will preserve service capacity and expand funding opportunities flowing through nonprofits.
At the same time, key tax policy changes – including property tax limitations (SB 33) and income tax reductions (HB 463) – introduce long-term pressure on state and local revenue, which may constrain future funding for nonprofit-delivered services. The failure of HB 890 (extending the nonprofit mailing sales tax exemption) further adds a direct cost increase for many organizations, particularly those reliant on fundraising and donor communications.
Bottom line:
Georgia nonprofits should view the 2026 session through a dual lens. The budgets provide meaningful investment and expansion in key service systems, creating real opportunities for nonprofit engagement and growth. However, tax policy changes introduce long-term uncertainty. Sustaining these gains will depend on how state and local revenue trends evolve in the coming years.
The overview below highlights key legislative actions and their impact on contracts, service capacity, cost structures, and the sector’s overall tax and funding landscape.
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Session Overview
Georgia’s 2026 legislative session was, on balance, a mixed but consequential session for nonprofits: positive in the near term, promising in several sustained service areas, but cautionary over the longer run.
The clearest positives came through the budgets. The amended FY 2026 budget restored and stabilized several human-service systems, especially child welfare, while the FY 2027 budget makes real investments in literacy, child welfare, Medicaid reimbursement, CAPS, home visiting, and SUN Bucks implementation. Those choices matter because they strengthen the public systems that often rely on nonprofits to deliver services.
At the same time, late-session tax measures – especially the property-tax package that moved from HB 1116 into SB 33, along with HB 463’s accelerated income-tax cuts – raise real long-term concerns. Even where they offer taxpayer relief, they may also narrow state and local fiscal capacity over time, increasing pressure on the contracts, grants, and service funding that nonprofits depend on.
Amended FY 2026 Budget (HB 973)
The amended FY 2026 budget, signed into law on March 3 by Governor Kemp, was the session’s clearest short-term stabilization measure for the nonprofit sector.
For nonprofits, the most important takeaway was that lawmakers used the amended budget to backfill urgent system pressures, including major DFCS support, foster care contract restoration, SNAP system improvements, and child welfare data investments. It also included rural health grants and continued investments in homelessness response and mental health infrastructure. In practical terms, the amended budget helped prevent deeper disruption in systems where nonprofit partners are already carrying significant service load.
FY 2027 Budget (HB 974)
The FY 2027 budget is where the strongest sustained opportunities for nonprofits emerged. Lawmakers approved a $38.5 billion budget on Sine Die, including investments in Medicaid provider reimbursement, foster care, SNAP administration, maternal home visiting, disability services, and rural health.
For nonprofits, this translates into a larger service delivery pipeline across child welfare, disability services, food access, community health, and maternal and infant health.
Literacy Investment
One of the session’s most important structural wins was the state’s literacy investment. The FY 2027 budget provides nearly $100 million for a statewide K–3 literacy initiative, including $70.4 million for school-based literacy coaches. Importantly, this funding is embedded into the QBE formula, creating a stable, long-term funding stream.
For nonprofits, this opens opportunities for deeper partnerships in education, tutoring, and family support.
Child Welfare & Family Support
The session delivered meaningful movement on child welfare and family support. Beyond the amended budget’s DFCS stabilization, the FY 2027 budget adds $50 million for rising foster-care costs and $3.8 million for prevention, reunification, clothing and supplies, and court-appointed special advocates. $1.5 million is directed toward broader child welfare services, including support for youth aging out of care and families at risk of system involvement.
In addition, Pre-K and CAPS-related decisions continued the broader family-support infrastructure. The budget provides $9.7 million in lottery funds for extended-day Pre-K, which in turn frees up $9.7 million in federal funds for CAPS.
New Summer Food Program Investment: SUN Bucks
SUN Bucks is one of the biggest underappreciated nonprofit stories of the session. The final FY 2027 budget includes $2 million total – split between the Department of Education and DHS – to begin implementation of SUN Bucks. The budget language says this will allow Georgia to draw down “significant” USDA matching funds for administration, and USDA confirms the program provides $120 per eligible child while reimbursing 50 percent of administrative costs. Separate Georgia reporting during the budget debate estimated that the $2 million state commitment could unlock roughly $143 million in federal grocery benefits for more than 1.1 million eligible Georgia children.
That makes SUN Bucks important on two levels: It brings a substantial flow of federal food dollars into communities, and it will likely increase coordination opportunities for food banks, summer feeding partners, schools, and family-serving nonprofits.
Property Tax Legislation (SB 33 / HB 1116)
The property tax package that began as HB 1116 and ultimately moved through SB 33 represents the session’s most significant long-term risk. By limiting property assessment growth, it may constrain local government revenue over time, potentially reducing funding available for nonprofit contracts and services. It may also increase cost pressures in commercial real estate markets.
Income Tax Policy (HB 463)
HB 463 accelerates income tax rate reductions, lowering rates immediately and setting up further cuts over time. While providing modest taxpayer relief, it raises concerns about long-term state revenue capacity and the sustainability of public investments that nonprofits depend on.
Nonprofit Sales Tax Mailing Exemption (HB 890)
HB 890 did not pass, which means that nonprofits’ sales tax mailing exemption is set to expire July 1, 2026. This translates to a direct cost increase for nonprofits, particularly affecting fundraising and donor communication. While modest at the individual level, the cumulative impact reduces fundraising efficiency, increases administrative burden, and disproportionately affects organizations reliant on direct mail.
To be precise:
- Nonprofits will likely begin paying sales tax on mailing-related expenses such as printing, postage, and fulfillment services, depending on final DOR interpretation.
- For organizations that rely heavily on mail (in terms of fundraising appeals, donor stewardship, or program communications), this becomes a new line-item expense.
Other Legislative Outcomes
HB 165 passed, providing an included tax exemption for affordable housing construction materials.
HB 1077 passed, extending sales tax exemptions for nonprofit arts and cultural admissions.
HB 1449 did not pass, scuttling the establishment of a small-business grant program that would have included nonprofits.
HB 1046 did not advance, removing a major sector risk in the form of new restrictions on nonprofit civic activity.
HB 1112 passed, which allows cash transactions to be rounded to the nearest nickel. For nonprofits, impacts are expected to be minimal and primarily administrative.
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