With Republicans touting it as a bipartisan deal, the $1.8 billion special education funding and tax cut bill negotiated by a pair of GOP leaders and outgoing Democratic Gov. Tony Evers passed the Legislature’s budget committee on a 12-4 vote Tuesday, with no Democratic support.
The Joint Finance Committee’s Democrats charged the bill didn’t do enough for schools or taxpayers while spending down the state surplus for short-term benefits.
About 20 minutes after the committee vote, Evers’ office sent out a press release in which the governor called on the Legislature to swiftly pass the measure he’s been calling a “blockbuster” since it was unveiled Monday. The Legislature is scheduled to meet Wednesday in a special session to debate and vote on the measure.
Attached to the email was a table listing more than 50 Wisconsin school districts and the additional special education money they’ll receive from the state if the deal passes.
The legislation will add $85 million to reimburse local school districts for the cost of special education in the current school year and $230 million for the 2026-27 school year. A Legislative Fiscal Bureau memo estimates the additional funding will raise the state’s reimbursement rate this year to 42.7% and for 2026-27 to 50%, but added that the actual rate “could be higher or lower, depending on final prior year aidable costs.”
When Wisconsin’s 2025-27 budget was signed in July schools were told they would get 42% of their special education costs reimbursed for the current year and 45% in 2026-27. But in November the Department of Public Instruction announced that special ed costs and enrollment had both increased, so the first round of payments would cover 35%.
Along with the additional special ed funding, the new bill will spend $302.5 million on state aid to public schools. Because of state revenue limits on school districts, the new state aid “would provide property tax relief but not additional resources for school districts,” according to the Legislative Fiscal Bureau memo.
The bill gives the state technical college system an additional $50 million in state aid starting in the 2026-27 school year, also to replace property tax revenue, not increase trade school budgets.
The legislation includes a $300 state income tax rebate for individual taxpayers whose state tax bill was at least that much in 2024.
It also would make tip income as well as overtime pay exempt from state income taxes, mirroring federal tax policies that have been enacted under President Donald Trump. While the federal exemptions expire at the end of 2028, the state exemptions don’t have a sunset.
So far, lawmakers in Evers’ own party have greeted the measure coolly. Finance committee Democrats on Tuesday welcomed the increase in special education money but said it wasn’t sufficient to meet the needs school districts have for more resources.
“I’m a no on this plan, not because I don’t appreciate education funding,” said Rep. Deb Andraca (D-Whitefish Bay), a former teacher, during the JFC’s hour-long discussion before the committee vote.
“I want our schools to get the predictable, reliable, education funding, indexed to inflation that they deserve without having to sue all of us,” Andraca said, referring to a pending lawsuit challenging the state’s school funding formula.
But State Rep. Mark Born, the JFC Assembly cochair, said the measure deserves to be enacted.
“There’s really nothing negative in the bill,” Born told the committee. “The bill gives money to special education, right? The bill gives lasting property tax relief to taxpayers of Wisconsin. The bill gives lasting income tax relief to the taxpayers of Wisconsin. And yes, the bill also gives a one-time immediate rebate check to taxpayers in Wisconsin. The bill actually helps people now.”
Rep. Tip McGuire (D-Kenosha) and Sen. Kelda Roys (D-Madison) both made pointed references to the bill as the product of three retiring elected officials — “three lame ducks,” in McGuire’s words. Along with Evers, a Democrat, Assembly Speaker Robin Vos and Senate Majority Leader Devin LeMahieu, both Republicans, are leaving office at the end of 2026.
None of the Democrats named Evers in their criticism of the bill, while Republicans touting the legislation invoked the governor several times.
“I think what we have before us is really balanced governing,” said Rep. Shannon Zimmerman (R-River Falls). “Gov Evers, working with majority party leadership, came together. Nobody got everything they wanted, but there’s a lot of good in this bill.”
Democrats emphasized what they said were the bill’s inadequacies, such as not guaranteeing “sum-sufficient” special ed funding that would fully meet the actual cost. Instead it designates a “sum-certain” amount, meaning there is a limited pot of money available, regardless of expanding need.
“It fails our schools,” said McGuire. “Our schools aren’t going to be getting the resources fully that they need. They’ve been struggling for 15 years under legislative Republican leadership.”
Roys — who is seeking the Democratic nomination to run for governor — referred to the presumptive Republican gubernatorial nominee’s opposition to the deal, although in support of a contrasting policy agenda.
“I find myself shocked to be with Republican Tom Tiffany,” Roys said. “Shocked to be agreeing with Republican [Sen.] Steve Nass, that this is a deal that does not help us fix the significant long-term structural problems we have — namely the way that we have robbed our children of their futures in defunding public education.”
Roys and McGuire both predicted a coming economic shakeup.
“There’s a presumption that this bill has, and that is that Donald Trump’s economy will succeed,” McGuire said. “And I think that I am among the 70% of Americans right now who do not believe that that’s true.”
Wisconsin, he argued, should prepare for a future that includes an economic downturn in the next six or nine months rather than spending too much of the state’s projected $2.37 billion surplus.
Born mocked those concerns. “We cut taxes again and you say, ‘Oh, you’re going to break us. You’re going to be bankrupt. Structural deficit. Oh my goodness. The sky is falling,’” he said. “Oh, next budget. More surplus, more Republican leadership on the budget, more partnering with our private sector partners to grow Wisconsin’s economy.”
