SB599: SB599 Local Government Budgets and Audits; regulation of local governments in fiscal distress; provide

Georgia currently has no formal statewide process for spotting local governments sliding into financial trouble before it becomes a crisis. This bill would add a new section to the state law on local government budgets and audits (O.C.G.A. Chapter 81 of Title 36) to fix that. The state auditor would build a 'financial health warning program' using financial ratios, audit reports, and other data to flag local governments that show signs of fiscal distress, such as cash flow problems, deficit spending, or missed audits. Local governments that fall 18 months behind on required annual audits would automatically trigger a preliminary finding of distress. Depending on severity, the Governor could approve a state assistance and oversight plan, and if a local government cannot or will not fix its finances, the Department of Community Affairs could recommend an emergency fiscal manager who would take over most financial decision-making until benchmarks in an approved remediation plan are met.

• Directs the state auditor to create numeric criteria and an annual review process to identify local governments at risk of fiscal distress.
• Automatically flags any local government that has not filed its required annual audit within 18 months of its fiscal year end as potentially in fiscal distress.
• Lets the Governor approve a state assistance, oversight, or targeted intervention plan, including emergency procurement of outside staff in urgent cases.
• Allows the Department of Community Affairs to recommend, and the Governor to authorize, appointment of an emergency fiscal manager who can approve budgets, payrolls, contracts, and debt payments for a struggling local government.
• Requires local officials and employees to cooperate fully with state-appointed staff and to provide access to financial records and systems.
• Directs the Department of Administrative Services to build a statewide roster of pre-qualified 'turnaround specialist' firms that can be hired to help distressed local governments.

Georgia's counties, cities, and other local governing authorities, along with their elected officials, appointed staff, and employees. It also affects the state auditor, the Department of Community Affairs, the Department of Administrative Services, and private consulting firms that could be hired as turnaround specialists or emergency fiscal managers.

If passed, local officials could lose control over budgets, payroll, contracts, and debt decisions if the state determines their government cannot fix serious financial problems on its own. Residents of an affected community could see an outside emergency fiscal manager, rather than their elected officials, making day-to-day financial calls.

• Subsection (a) defines key terms including 'fiscal distress,' 'emergency fiscal manager,' 'state intervention plan,' and 'turnaround specialist.'
• Subsections (b) and (c) require the state auditor to publish specific data points, thresholds, and a scoring method for the annual financial health warning program.
• Subsection (c)(3) deems a local government in preliminary fiscal distress if it has not submitted its required annual audit within 18 months of its fiscal year's close.
• Subsections (d) and (e) set out the notification, review, and Governor-approved state assistance or intervention plan process, including required consultation with legislative leaders.
• Subsection (f) requires local governing bodies, officials, and employees to cooperate fully with state-appointed staff and provide access to records and systems.
• Subsection (h) authorizes the Department of Community Affairs to appoint an emergency fiscal manager with power to approve contracts, payroll, debt payments, and budgets, suspending the local governing authority's fiscal powers.
• Subsection (i) directs the Department of Administrative Services to create a statewide roster of qualified turnaround specialist firms for hire.
• Section 2 repeals all conflicting laws.

1. 2026-02-26Senate Read and Referred (Senate)
2. 2026-02-25Senate Hopper (Senate)

• Jason Anavitarte (R, SD-031)Primary sponsor
• Steve Gooch (R, SD-051)
• Clint Dixon (R, SD-045)
• Timothy Bearden (R, SD-030)

• local government finance
• fiscal distress oversight
• emergency fiscal manager
• county and city budgets
• state audits