Wisconsin state leaders announced a bipartisan agreement to allocate a large portion of the state’s surplus toward K-12 education, property tax relief, and direct payments for working families. The package dedicates over $600 million to schools, including a historic increase in the special education reimbursement rate to 50%, the highest ever in the state’s history.
The new funding boost for schools also includes $300 million in general school aid and $50 million aimed at property tax relief through the Wisconsin Technical College System. Officials emphasized that the increased special education reimbursement will allow school districts to redirect local funds to other priorities since the state will cover a larger share.
In addition to education spending, the deal provides direct payments to Wisconsinites who filed 2024 individual income tax returns with most of their income originating in the state. Single filers meeting this criterion will receive $300, while married couples filing jointly will get $600. More than three million residents are expected to qualify, with payments administered like tax refunds.
The agreement also permanently exempts state income tax on cash tips and overtime pay, distinguishing it from federal measures by making the tax cuts permanent without expiration. Funding for the package will come from the general fund and the state’s rainy-day fund, which is projected to grow in coming months. Lawmakers planned to present the proposal to the Joint Committee on Finance, with full legislative votes expected shortly thereafter and the governor preparing for a prompt signing.