On February 18, Governor Evers delivered his budget address, officially kicking off the state’s biennial budget process. His proposals build on his previously announced Year of the Kid theme for 2025, including a $3.4 billion increase in school funding and a $2 billion tax cut package. The tax package features an income tax exemption on tips, the elimination of sales tax on certain consumer goods, and a new initiative aimed at controlling property tax increases by providing payments to local governments that freeze their property tax levies. To offset those tax increases, the Governor’s budget also raises some taxes by $3.3 billion, for a net increase in taxes of $2.4 billion, potentially leading to a shortfall in the billions of dollars in future budgets.
As in previous years, Republican leaders quickly declared the budget proposal “dead on arrival.” The chair of the Joint Finance Committee, Senator Howard Marklein, stated that the GOP will construct the budget from base, using the previous session’s budget as a starting point and removing all policy items included by the Governor.
The Joint Finance Committee will hold four listening sessions across the state to gather input from constituents and stakeholders on their budget priorities. It remains uncertain whether the Legislature will pass a budget before the new fiscal year begins on July 1. The final budget will cover fiscal years 2025-26 and 2026-27.
Below is a list of the key proposals we’re monitoring for the Fox Cities:
AB 38/ SB 36 (Rep. Tusler/Sen. Jacque) – Creates an income tax exemption for cash tips paid to employees.
AB 17/SB 21 (Rep. Sortwell/Sen. James) – Establishes a tax credit for employee ownership conversion costs, a capital gains deduction for business transfers to employee ownership, and an employee ownership education and outreach program.
AJR 006/SJR 007 (Rep. Steffen/Sen. Bradley) – Recognizes nuclear power and fusion energy as clean energy sources critical to meeting Wisconsin’s energy demands. Declares the legislature’s commitment to expanding nuclear power, developing nuclear technologies, and investing in fusion energy.
AB 52/SB 60 (Rep. Bare/Sen. Spreitzer) – Expands the homestead income tax credit to provide additional relief for homeowners.
AB 60/SB 58 (Rep. Allen/Sen. Cabral Guevara) – Referendum questions to include how much property taxes would increase for the median-valued single-family home for certain referenda that affect property taxes.
LRB 1318 (Sen. Jacque) – The sales and use tax exemption for electricity and natural gas sold for residential use.
by Jim Steineke, Government Affairs & Advocacy