Democratic Gov. Tony Evers unveiled his 2025-27 biennial budget proposal last week — a two-year plan totaling nearly $119 billion compared to the $100 billion budget currently on the books.

Republicans lawmakers who control the powerful budget writing committee immediately vowed to throw out the governor’s spending plan this spring. Assembly Speaker Robin Vos, R-Rochester, said Evers’ proposals are “dead on arrival.”

Many of the governor’s recommendations have been reviewed and rejected by GOP lawmakers in previous budgets, like his plans to expand Medicaid or legalize marijuana.

But in this year’s budget address, he introduced several new items. Here are four examples from the governor’s fourth state budget proposal.

No tax on cash tips

“No tax on tips” quickly became a Republican mantra on the 2024 campaign trail after it was heavily touted by President Donald Trump. But Democrats have followed suit, coming out in support of the popular policy.

For the first time, Evers is seeking to eliminate income taxes on cash tips in the budget, a proposal that mirrors a Republican-authored bill in the Legislature. The plan would reduce state revenue by just under $7 million annually — a paltry amount compared to the roughly $11 billion in individual income tax the state expects to collect each year.

“Interesting. @GovEvers wants to eliminate tax on tips (great idea, swear I heard it somewhere before) but not a single Democrat co-sponsored the bill that Sen. (Andre) Jacque and I authored to create tax exemption for tips. I’m glad we can count on Evers’ support,” state Sen. Julian Bradley, R-New Berlin, wrote on X.

Service industry workers might shrug when they discover that the tax exemption would only apply to tips left in cash and would not exempt the majority of tips, which are left on a credit card. But that’s not the only reason why Jason Stein, president of the Wisconsin Policy Forum, says the proposal would have little impact.

“Many of the lower wage workers who receive tips may not have to pay any state income taxes as it is,” Stein told Wisconsin Watch. “There are other policies like the earned income tax credit that would benefit low-wage workers…they’re more industry-neutral. They’re profession-neutral.”

Free college tuition for Native American students

In another new proposal, Evers recommended providing full tuition waivers for any student who is a Wisconsin resident, a citizen of any of the state’s 11 federally recognized tribal nations and enrolled at a Universities of Wisconsin System or Wisconsin Technical College System school. The governor’s office could not confirm the cost of this specific proposal, but noted it is part of a $129 million effort to increase affordability in the UW System over the next two years.

The proposal mirrors the Wisconsin Tribal Education Promise already in place at UW-Madison, which covers all educational costs for Native students who are citizens of a tribal nation. That program began last fall, is not tied to household income and is funded in part by philanthropy rather than state funds.

The program was announced in December 2023, shortly after Universities of Wisconsin regents struck a deal with Republican lawmakers to end diversity hires across their campuses in exchange for previously approved employee raises and project funding. Chancellor Jennifer Mnookin said the program is a testament to the university’s commitment to diversity.

Universities in other states have launched similar initiatives in recent years, granting in-state tuition for Native students.

Auditing health insurance companies

Evers wants Wisconsin to be the first state in the nation to audit insurance companies that frequently deny health care claims. But the details of this plan, such as how frequently an insurance company would have to deny claims to be audited, are slim.

“If an insurance company is going to deny your health care claim, they should have a darn good reason for it. It’s frustrating when your claim gets denied and it doesn’t seem like anyone can give you a good reason why,” Evers said. “If an insurance company is denying Wisconsinites’ claims too often, we’re going to audit them. Pretty simple.”

The plan would cost $500,000 in program revenue, potentially from new fines, for two full-time positions over the next two years “to establish a framework for auditing high rates of health insurance claim denials among insurers offering plans in the state over which the office has regulatory authority.”

The new office would set the percentage of claim denials that would warrant an audit. The office would then enforce “corrective action” through fines or forfeitures.

New tax bracket for millionaires

Evers is also seeking new ways to increase state revenue. This includes his plan to “ensure millionaires and billionaires in Wisconsin pay their fair share” through a new individual tax bracket of 9.8% that would apply to income for single and married joint filers above $1 million. For married couples filing separately, income above $500,000 would also fall under this tax bracket.

The new tax is estimated to generate nearly $1.3 billion over the next two years.

The current top income tax rate is 7.65%, covering married joint filers with an income above $420,420 and individuals with an income above $315,310.

This article first appeared on Wisconsin Watch and is republished here under a Creative Commons license.

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