ATLANTA (AP) — Georgians will owe less in income taxes this year and will get a chance in November to vote to cap increases in how homes are valued for property taxes.

Republican Gov. Brian Kemp on Thursday signed measures cutting income taxes by a projected $700 million on residents and businesses. The income tax cuts are retroactive to Jan. 1.

“All of these bills help keep money where it belongs — in the pockets of our hardworking families,” Kemp said during a signing ceremony in Augusta, Georgia.

Election-year tax cuts are always popular in the state, and all 236 state House and Senate seats are on the ballot this year. All the measures were supported by at least some Democrats, while receiving overwhelming Republican support.

Georgia’s personal income tax already dropped on Jan. 1 to a flat tax of 5.49%. Before that, the state had a series of income tax brackets that topped out at 5.75%.

Under the 2022 law that created the flat income tax, the tax rate is supposed to drop 0.1% annually until it reaches 4.99%, if state revenues hold up. One bill signed by Kemp on Thursday accelerated the decrease, lowering the tax rate to 5.39% this year. That’s projected to save taxpayers an additional $360 million, on top of the $800 million in revenue the state is projected to forgo as part of the already-enacted cut.

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The corporate income tax had stayed at 5.75% when the personal income tax fell on Jan. 1, but supporters argued it was unfair to tax businesses at a higher rate than individuals. Under another bill signed by the governor the corporate income tax rate would keep falling along with the personal income tax rate until it reaches 4.99%.

The corporate income tax cut is projected to cost $176 million in its first full year, and $210 million by 2029. That doesn’t account for future rate reductions.

Kemp on Thursday also signed a bill that would raise the amount taxpayers could deduct for children and other dependents to $4,000 from the current $3,000. With Georgia’s income tax rate currently at 5.49%, that works out to as much as $55 more per dependent, or about $150 million statewide.

Even though tax collections are decreasing, Georgia can afford tax cuts because the state spent much less than what it collected in taxes over several years and had $10.7 billion in unallocated surplus at the end of the last budget year.

“Thanks to our responsible conservative approach to budgeting, we’ll be able to sign this legislation knowing that Georgia will still be financially sound no matter what economic fortunes are ahead of us in this state,” Kemp said.

He continued to portray income tax cuts as a response to help people facing inflation, although economists largely agree that tax cuts tend to fuel inflation by putting more money into circulation.

The governor also signed a bill that makes changes to property tax assessments. It would take effect if voters approve a state constitutional amendment on November’s ballot.

The plan would limit increases in a home’s value, as assessed for property tax purposes, to the rate of inflation each year, unless a city or county government or local school board opts out by March 1 of next year.

Lawmakers said that would prevent “back door” tax increases by governments that pocket more revenue when home values go up, by failing to lower tax rates. Many rank-and-file lawmakers say discontent over rising property tax bills is the top concern they hear from constituents. Statistics show overall Georgia property tax collections rose 41% from 2018 to 2022, with total assessed value rising by nearly 39%. Those figures represent not only existing property but also new buildings.

For homeowners with a homestead exemption, the cap would last as long as they own their home. The assessed value would reset to the market value when a home is sold.

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