State Budget Tax Cuts, More School Funding

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Knoxville (WVLT) - Tennessee’s new 27-plus billion dollar budget is sitting on the governor's desk awaiting his signature.

It's a budget that saves the state money, and helping the Rainy Day Fund to dramatically increase.

As Volunteer TV’s Jim Freeman finds out, that's good news for the politicians, but what does it mean to all of us?

The bottom line in this budget is education funding and tax cuts. The governor says the new BEP 2.0 funding plan is good for your children and the tax cut on food will help all of us.

Knox County Schools gets almost $27million more dollars a year in the new budget.

"I'm really thrilled when anything positive like that happens in the state of Tennessee especially for public schools,” says Rocky Hill Elementary parent Sarah Kerr.

A freeze on property taxes for people aged 65 and older is welcome news to seniors.

"Of course, I have to pay city and county and unfortunately, I have an expensive home so they hit me pretty hard,” says Carroll Jacobs.

There are income ceilings and they vary by county. Knox County's is just under $33,000 per year.

Another plus to the next year's budget is the drop in the sales tax on groceries. It falls from 6% to 5.5% beginning January first.

"It would make buying groceries a lot easier, and well all have to buy groceries. It would be something that would help us all save,” says Abby Robinson.

And speaking of saving, the state's Rainy Day Fund is up, but how does it compare to our neighbors?

Mississippi and Kentucky are just under a quarter-billion dollars. Alabama is beyond a half-billion. Georgia and North Carolina surpass three-quarter billion while Virginia tops a billion. Tennessee's "Rainy Day Fund" is at an all-time high at nearly a billion dollars.

"I think you need an adequate rainy day fund. And I think Governor Bredesen is fully capable of managing that. If he says it's appropriate, I concur with what he's saying,” says Knox County Mayor Mike Ragsdale.

Compared to last year's rainy day fund figures, Alabama is up $29 million. Virginia's $100 million is impressive. But Tennessee is the clear winner in the jump from 2007 to 2008 at more than a quarter-billion dollars.

The state currently pays all property taxes for military veterans that are totally disabled as the result of combat injuries.

That's now expanded to cover those disabled by any service connected injury.

More than two-thousand more veterans are eligible for the program.

To see the new state budget, follow the link below.

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