Gov. Tony Evers and Republican legislative leaders reached a sweeping $1.8 billion bipartisan agreement Monday to boost K-12 funding and provide statewide property tax relief.
The deal, which utilizes a significant portion of the state’s projected budget surplus, includes direct rebates to taxpayers and new income tax exemptions for overtime and cash tips. The package comes as updated revenue projections suggest the state will collect between $300 million and $350 million more in taxes than previously estimated.
“This is about finding common ground to support our kids and give Wisconsin families some breathing room in their household budgets,” Evers said in a statement.
The agreement allocates $600 million for K-12 education. Under the terms, $300 million is earmarked for special education reimbursement rates. The deal also includes $300 million to lower property tax rates by partially offsetting the school portion of the tax.
The package, which utilizes a significant portion of the state’s projected budget surplus, includes $600 surplus refund payments and new income tax exemptions for overtime and cash tips. The package comes as updated revenue projections suggest the state will collect more in taxes than previously estimated.
“Through the bipartisan investments we’re announcing today, the special education reimbursement rate will be 50 percent—double what it was when I first took office,” Gov. Evers said.
The governor noted that the plan provides more than $350 million in statewide property tax relief while eliminating income taxes on cash tips and overtime.
“It’s a historic day for Wisconsin’s kids and our schools, and I’m jazzed we were able to get this done,” Evers continued. “I want to thank Speaker Vos and Majority Leader LeMahieu for their leadership and willingness to work across the aisle over the last several months. This is a blockbuster deal for Wisconsin.”
Legislative Republicans, who have long advocated for broad-based tax relief and spending restraint, emphasized that the state’s fiscal position allowed for these returns to taxpayers.
“Republicans have fought hard to control spending, and now we have a sizable budget surplus,” Assembly Speaker Robin Vos said. “We’re sending it back to help families with the pressure of increasing costs, reward hard work, and to continue investing in schools to help stabilize rising property taxes.”
The agreement includes several key policy shifts:
- Surplus Refunds: The deal provides immediate relief via $600 surplus refund payments.
- Special Education: Funding will be increased to reach a 50 percent reimbursement rate for school districts.
- Tax Exemptions: Both cash tips and overtime pay will be exempt from the state income tax to reward “hardworking taxpayers.”
- Property Tax Relief: More than $350 million is earmarked to mitigate rising property tax costs across the state.
“Our top priority in this process was to return the state’s surplus to those who created it: hardworking taxpayers across the state,” Senate Majority Leader Devin LeMahieu said. “This deal will provide immediate relief with $600 in surplus refund payments and provide permanent property and income tax relief for Wisconsin families.”
The proposal is expected to move through the legislative committee process this week. If passed and signed, the property tax relief would be reflected in upcoming bills, while refund payments would be distributed to residents later this year. However, it’s fate remains uncertain as several legislative democrats and at least one Senate Republican have voiced opposition to the package.
Legislative language and Legislative Fiscal Bureau analysis were not available at time of publication. We therefore do not know if other spending is included in the package, the details will emerge as the Joint Finance Committee meets Tuesday.
