Tennessee Governor Bill Haslam (R-Knoxville) spent a great deal of his State of the State address last night discussing education, and his budget proposal includes a full funding of the Basic Education Plan, a limited school voucher test, over $307 million for education capital projects, and a 1.5% pay raise for State employees. That might sound like too much spending, except when one considers that both the Governor and the General Assembly are also proposing to put a whopping $100 million dollars in the Rainy Day Fund, bringing its total to $456 million by June of 2014.
What is the best news in the budget proposal for all Tennesseans? Probably the news that even more tax cuts could be forthcoming, including a proposal to reduce the grocery tax from 5.25% to a flat 5%, which will reduce the grocery bill for thousands of working Tennesseans each day, especially the working poor. Tennessee’s only form of income tax, the Hall Tax on dividends, may be reduced for seniors, who could be able to claim an exemption of up to $37,000, or $59,000 for those who file jointly.