ATLANTA (AP) — After years of holding spending far below what Georgia was collecting in revenue, Gov. Brian Kemp is proposing a big boost in outlays.

In budgets released Thursday, the Republican governor proposes spending an additional $5 billion in the current budget running through June. In the 2025 budget beginning July 1, Kemp proposes increasing spending by $3.6 billion over this year’s original budget, including pay raises for more than 300,000 state employees and teachers that he outlined in his State of the State speech.

Georgia has $5.4 billion set aside in its rainy day fund, which is filled to its legal limit of 15% of state revenue. Beyond that, it has $10.7 billion in surplus cash collected over three years. Kemp proposes spending $2 billion of the surplus, but would leave $8.7 billion.

The state is so flush that Kemp wants Georgia to pay cash for all construction and renovation projects he’s proposing. Office of Planning and Budget officials said they couldn’t remember the last time the state hadn’t borrowed money in a year. In July, Georgia sold $880 million in bonds. Paying cash is projected to save $1.3 billion in interest costs over 20 years.

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Kemp wants to use $500 million to shore up a state employee pension fund, allot $1.5 billion for road construction and maintenance, use $250 million to finance water and sewer work and set aside $250 million for grants to attract industry.

Overall Georgia would spend $37.5 billion in state money in the current budget under Kemp’s plan and $36.1 billion in 2025. But Kemp still takes a pessimistic view of revenue, predicting tax and other collections will fall nearly 7% through June. State tax revenues are declining, but not yet by such a steep amount.

Public school teachers would get a $2,500 raise beginning July 1, boosting average teacher pay in Georgia above $65,000 annually. That’s in addition to a $1,000 bonus that Kemp sent out in December, a move lawmakers must ratify when they amend the current budget. Atop their $1,000 bonus, state and university employees would get a 4% pay increase, up to $70,000 in salary. The typical state employee makes $50,400.

Combined, that’s $630 million in pay raises. Teachers have previously gotten $7,000 in raises during Kemp’s first five years in office.

Some employees would be singled out for more. State law enforcement officers would get an additional $3,000 bump, atop the $6,000 special boost they got last year. Child welfare workers would also receive extra $3,000 raises.

Pay raises aren’t the end of the largesse for public education, where the governor proposes adding $1.4 billion overall. That’s a nearly 12% increase in funding, the largest percentage increase for any major state government function outside the court system.

Kemp in December said he would ask lawmakers to start a yearly appropriation for school security, allotting $104 million. And Thursday Kemp pledged a $205 million increase for public school transportation, boosting the state’s share of buying and operating school buses after pushing more costs onto school districts for decades. Kemp also wants $11 million to provide coaches to improve reading instruction and finance a literacy screening test.

Craig Harper, executive director of the Professional Association of Georgia Educators, the state’s largest teacher group, said the association “celebrates Gov. Kemp’s announcements today of funding priorities that will benefit educators, students, and communities via salary increases, pupil transportation, literacy, and school safety.”

There’s also new money for prekindergarten and universities. Kemp proposes that over four years, the state reverse a longstanding budget cut to the Department of Early Care and Learning, pulling prekindergarten class sizes back down to 20 children after years at 22. Kemp would spend $11 million for the first installment. Kemp also proposes restoring $66 million in public university funds cut in a House-Senate dispute last year.

Outside of education, the biggest spending increases would come in health care and mental health. Georgia would spend $118 million in higher payments to nursing homes, $44 million to boost reimbursements for in-home care for the elderly and disabled and $102 million to increase reimbursements for in-home care for the people with intellectual or developmental disabilities.

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