(The Center Square) – Wisconsin’s Joint Finance Committee approved a bill on Tuesday with a 12-4 vote that will increase state special education funding, provide tax rebate checks and replace some local property tax funding with state school aid.
The bill also would end income tax on overtime and cash tips, a permanent change that will outlast a federal law set to do the same.
The Assembly and Senate are scheduled to meet on the bill in special session on Wednesday.
The bill saw opposition from both Republican and Democrat candidates for governor, including Congressman Tom Tiffany.
“The surplus is here now, we’re here now,” said Rep. Mark Born, R-Beaver Dam, stating that the bill would look different if Tiffany was governor.
The bill includes $300 income tax refund for individuals and $600 for those married and filing jointly based upon the 2024 tax year and those who earned more than the tax refund and 90% of their income was earned in Wisconsin.
The refund, set to be sent by September, will cost the state $870 million as lawmakers spend down $1.8 billion of the projected $2.37 billion surplus at the end of the current budget cycle. A new report from the state’s Legislative Audit Bureau says that tax collections are tracking $300 million to $350 million ahead of January estimates.
Rep. Tip McGuire, D-Kenosha, objected to the fact the bill won’t provide a check for those on social security, which is not taxed as income by Wisconsin.
“There is a lot of good in this bill,” said Rep. Shannon Zimmerman, R-River Falls.
The bill includes $300 million in general school aid, which will replace that amount of property tax obligations across the state, along with $300 million in additional special education funding and $50 million additional to the Wisconsin Technical College System that will also replace property tax obligations.
The bill mirrors federal law by eliminating state income tax on overtime, which will amount to a $328 million tax cut statewide over two years, and eliminate income tax on cash tips, amounting to a $102 million cut over two years.
