Tennessee's Legislature approved a $27.8 million budget for fiscal year 2007-2008 today that both relieves and increases taxes.
The budget reduces the state food tax by one-half percent, creates an additional tax holiday in March 2008 and raises the cigarette tax by 42 cents.
The one-half percent reduction in food tax can mean slightly smaller totals at the grocery store from Murfreesboro shoppers. The reduction brings Rutherford County's food tax from 8.75 percent to 8.25 percent.
"I think it's good for those on the poverty level," said father of two Chris Anderson, who spends $200 a week on groceries. "For everybody else it'll help offset the gas increase, especially with the surplus."
Tennessee expects to reap a $350 million budget surplus this year, some of which will be used to fund the food tax relief.
"I'm happy to see it but I think we can do better than that. Especially with gas prices going up that makes everything else go up," said mother of one Cherri McCrary, who spends $150 every week to 10 days to feed her family.
The cigarette tax increase to 62 cents per pack is projected to add more than $200 million to schools.
"We rarely get all the money we ask for and this will help fill the gap," said James Evans, public information officer with Rutherford County Schools.
Rutherford County Board of Education expects to receive almost $13 million in new school funding, much of it resulting from changes in the state education spending formula.
"But there are major restrictions on how the money can be used," Evans said. "We know that some of the money has to be used for at-risk children."
At-risk children are generally behind their peers because of social reasons, such as limited English or a low-income background, Evans explained.
The county school system will put the extra funds in its budget and decide at a meeting Wednesday night where the money will go.