(The Center Square) – Gov. Tony Evers and Republican legislative leaders announced a deal that will send $600 million more to Wisconsin K-12 schools, ends income tax on cash tips and overtime income and includes a $300 tax refund for individuals and $600 for married couples.
The plan is expected to be voted on by the Joint Committee on Finance on Tuesday before it heads to the full Assembly and Senate on Wednesday with Evers planning to sign the deal as early as next week.
The plan was the result of negotiations between Evers, Assembly Speaker Robin Vos and Senate Majority Leader Devin LeMahieu.
“I’ve always said that what’s best for our kids is what’s best for our state – it’s why it’s been important to me throughout this process that we make sure our kids and our schools have the resources they need while also lowering property taxes and giving working families a little breathing room in their household budgets,” Evers said in a statement. “After months of hard work, I’m proud we were able to put politics aside on a plan to use a portion of our historic state surplus to do the right thing for Wisconsinites across our state.”
Wisconsin was estimated to finish the current budget cycle with a $2.37 billion surplus while 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.
“Republicans have fought hard to control spending, and now we have a sizable budget surplus,” Vos said in a statement. “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 tax refunds are for Wisconsin residents who earned 90% of their income in the state during the 2024 tax year.
“Our top priority in this process was to return the state’s surplus to those who created it: hardworking taxpayers across the state. This deal will provide immediate relief with $600 in surplus refund payments and provide permanent property and income tax relief for Wisconsin families,” LeMahieu said in a statement.
The deal includes $300 million in general school aid along with $300 million in additional special education funding and $50 million additional to the Wisconsin Technical College System.
“This aid is counted under each district’s revenue limit and, as a result, reduces each district’s operational levy by an equal amount, ensuring the district doesn’t have to raise its local levy and reducing the tax burden on local property taxpayers,” the announcement explained.
The deal also 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.
