Evers Calls For $2 Billion Tax Cut, Historic School Funding

Gov. Tony Evers. Photo by Emily Hamer / Wisconsin Center for Investigative Journalism.

Calling for a significant investment in kids from preschool to college, Gov. Tony Evers proposed a budget Tuesday that would invest heavily in education, increasing overall state spending by billions of dollars in the process.

The governor’s budget proposal would increase K-12 spending by a substantial $3.15 billion, in addition to more than $850 million for the Universities of Wisconsin System. A child care subsidy, previously subsidized by the federal government, would be paid for by $480 million in state funds under Evers’ plan.

Evers also called for what he described as $2 billion in tax cuts, which would cover everything from an eliminating a sales tax on electricity and natural gas for homes, to a cutting state income taxes on tips. At the same time, his budget would increase taxes on the wealthy, creating a new top tax bracket for millionaires to generate $1.3 billion.

Overall, including state and federal funds, the budget would total nearly $119 billion, an increase of about 20 percent. When looking only at state funds, it would spend about $50.5 billion, an increase of 18 percent.

During his budget address Tuesday evening at the Capitol, Evers said lawmakers must work to balance investing in the state while “stay(ing) within our means.”

“We have a duty to do what’s best for our kids and future generations,” he said. “We must continue to do the right thing for Wisconsin if we want to protect the future we’ve worked hard to build together.”

Evers also alluded several times in his speech to federal spending cuts by President Donald Trump’s administration that he argued could hurt the state.

“With irresponsible decisions in Washington every day hurting people in Wisconsin, we will need to have state resources readily available to respond to basic and emergency situations alike,” he said.

Many of the governor’s proposals will almost assuredly fail in the Legislature. Majority Republicans typically toss Evers’ budget aside and build their own through the Joint Finance Committee.

Speaking to reporters after the address, Assembly Speaker Robin Vos, R-Rochester, said most of the Governor’s proposals would not make it through the Legislature.

“We are not going to let Wisconsin become Tim Walz’s Minnesota,” he said.

School funding in ‘The Year of the Kid’

At his State of the State address last month, Evers named 2025 as the “Year of the Kid.” He described his biennial budget proposal as the “most pro-kid budget in state history.”

Evers has repeatedly called for increased funding in K-12 education, and proposed $3.15 billion for schools in the 2025-2027 budget. That’s shy of the $4 billion State Superintendent Jill Underly had requested, but Republicans have said they won’t approve spending increases without changes in standards and testing.

Evers’ plan includes the “highest-ever” amount of special education aid funding, at $1.1 billion, to support increasing the state’s reimbursement rate to 60 percent for special education.

On Tuesday, Evers argued that too many communities have turned to local property taxes to make up for state funding shortages, and the government can strike a balance between tax relief and school funding.

“My plan invests in public education at every level while holding the line on property taxes to make sure the average homeowner will not see a property tax increase,” he said.

The plan would offer direct payments to local governments who agree not to raise local property taxes.

Evers also called for $60 million to go towards technical colleges, and for $856 million for the UW system, which Evers said would be the largest two-year increase for UW in state history.

“After years of attacks and disinvestment, UW is facing campus closures and program cuts, students are facing tuition increases, and faculty and staff are facing layoffs,” he said. “And with new federal efforts to cut higher education funding, things for UW could get a whole lot worse.”

The proposal would also put $80 million toward literacy initiatives, and $300 million towards removing lead from schools, homes, and childcare centers. Evers argued many of his proposals are part of a holistic investment in kids, calling on bipartisan support for things like free school meals and mental health services in schools.

“If the state isn’t committed to meeting some basic needs, then we can’t have serious conversations about improving outcomes,” he said. “It’s that simple.”

$2 billion in tax relief

Evers and Republicans have frequently sparred over tax cuts. Republicans have repeatedly proposed reducing taxes by using the state’s multibillion surplus, while Evers has said he’ll only support tax relief that targets middle class families. He’s vetoed several GOP tax cuts in the past, and signed a $2 billion cut in 2021.

This year’s proposed tax relief would come through a combination of lower property and income taxes for some classes of people and eliminating some sales taxes. Evers called for an increased personal income tax exemption, and for an end to taxes on service industry workers’ tips.

That’s a proposal popularized by President Donald Trump on the campaign trail. It was later backed by his Democratic opponent, Kamala Harris, and several states have put forward bills to eliminate those taxes.

Evers’ proposal would also eliminate sales tax on over-the-counter medication, which his office estimates would save people about $70 million over two years.

Senate Majority Leader Devin LeMahieu, R-Oostburg, called Evers’ tax proposals “gimmicky,” and Vos said Republicans would instead focus on broad tax relief.

“You’re going to see the bills that we announce in the coming weeks will be much more broad based, much more focused on getting money back to families to deal with the rising costs and inflation and prices than what Governor Evers has,” Vos said after the speech.

Targeting healthcare costs

Evers proposed initiatives aimed at making healthcare more affordable, and to require more transparency from insurance providers. That includes a new state office for people to investigate why claims have been denied.

According to the Governor’s office, that would make Wisconsin the first state to audit insurance companies over claim denials.

“If an insurance company is denying Wisconsinites’ claims too often, we’re going to audit them,” Evers said.

The budget also proposes creating new standards for what insurance companies must cover, which Evers says is a way of preventing “prior authorization” requirements.

“Health insurance, not your doctors, are deciding whether your prescribed treatment is medically necessary,” Evers said. “They’re banking on being able to avoid covering the services and treatment you need.”

Evers’ proposal would also ban health insurance companies from requiring pre-approval for in-patient mental health services, and require a grace period of six months between a person not paying a medical bill and that bill going to a collections bureau.

“Wisconsinites aren’t getting a fair shake when it comes to health care, and I want to change that,” Evers said.

Republicans call Evers’ budget ‘dead on arrival’

Addressing reporters after the speech, Vos, the Assembly Speaker, criticized Evers’ spending proposals, and said most of what the Governor had put forth would be “dead on arrival” when coming before the GOP-held Joint Finance Committee.

“This is kind of like the movie Back to the Future. He tried these things for the last two, four and six years in his budgets,” Vos said. “Just like then, lots of tax increases, lots of spending. And I have a belief that my colleagues will reject them, just like they did before.”

Sen. Howard Marklein, R-Spring Green,  who co-chairs the Joint Finance Committee, said Republicans would bring the budget back to base, meaning that they’ll start at only the programs that Wisconsin is obligated to fund, and rebuild the document from scratch.

“We’re going to build a budget that’s fair, that’s sustainable into the future, and doesn’t impact our businesses and our families adversely,” he said.

Republicans said they’ll prioritize “broad-based” tax relief, but didn’t share specifics. Vos said they’ll introduce tax cut proposals in the near future.

And Rep. Mark Born, R-Beaver Dam, who co-chairs the Joint Finance Committee with Marklein, said that Republicans will also prioritize cutting the state workforce.

“One of the ways that we sought to bring responsible budgeting to the state budget was to make government smaller and less intrusive in our lives,” he said. “We are going to increase our efforts in this budget to look for more opportunities to cut both spending and positions.”

Other major proposals

The budget proposal unveiled Tuesday contained dozens of other initiatives. All would need approval by Republican lawmakers.

Some of these proposals would:

• Expand BadgerCare under the Affordable Care Act, a proposal that has been roundly rejected by GOP leadership in the past
• Expand Medicaid access for new moms, a bipartisan proposal that is also under consideration in the Legislature
• Expand broadband access for $400 million
• Put $145 million towards fighting PFAS contamination
• Target lead contamination through $100 million for the Windows Plus Program, which replaces contaminated windows in homes, and $200 million for lead service line replacements.

Evers calls for historic school funding in $119 billion budget proposal was originally published by Wisconsin Public Radio.