Surplus plans come up. Property tax cuts? Schools? REBATES?

In the last few days, there's been quite a bit of discussion at the Wisconsin Capitol in regards to what should be done with the state's new $2.5 billion budget surplus. This includes the release of an email where Governor Evers told Assembly Speaker Robbin’ Vos about a K-12 schools and tax cut deal that he would be OK with.

The email shows Evers’ staff offered to sign one bill that includes the guv’s priorities of $200 million to increase reimbursements for special education and $450 million for general school aid, which would drive down how much districts can raise through property taxes to cover their costs.

In exchange, his staff offered support for putting $550 million into the school levy tax credit, which offsets some of what homeowners would otherwise pay in property taxes for schools. The offer also included $97.3 million toward exempting cash tips….

According to the email, GOP leaders had rejected Evers’ call to make reimbursing special education expenses sum sufficient.

The state budget included a nearly $505 million increase in special education through a sum certain appropriation. That means that the amount of money for special education aid is capped and districts will receive a prorated amount to reimburse their costs from that pot of money.

When the budget was signed, the Legislative Fiscal Bureau projected the boost in state money would result in a reimbursement rate of 42% in 2025-26 and 45% in 2026-27. But DPI notified districts in November that the interim proration rate for 2025-26 is 35% after costs in 2024-25 increased by 9% rather than the expected 4%.

Do we got a deal?

And Vos indicated this week that he and the other Assembly Republicans might be OK with something similar to that package. To the point that Vos backed away from demands that Evers get rid of his "400-year veto" guaranteeing an increase in available resources for public schools.

Assembly Speaker Robin Vos, R-Rochester, reiterated Feb. 11 that he will not make a relief package contingent on a repeal of Gov. Tony Evers' budget veto that provided school districts with revenue increases for four centuries – something Vos previously said would have to be "part of the discussion."

"Look, I think the 400-year veto is wrong. But I also think that the most important thing for us is to make sure that the surplus is given back to people to help deal with rising property taxes, rising electric costs and all the associated things dealing with inflation," Vos told reporters, adding that he won't require a veto repeal "as the only way that we get a deal."

Vos said his office had a "good meeting" with Evers' staff the previous day to look for areas of agreement as they seek to use some of the state's projected $2.5 billion surplus to offset soaring property taxes.

As I’ve said before, it’s silly for Republicans to try to hold hostage the $325 per student increase for K-12 schools, since Evers won’t change that total for next year, and because a future Governor and Legislature can change the amount of schools’ revenue limits whenever they agree to do so.

So Vos seems to be throwing that tactic away, and (at least publicly) wants to be seen working with Evers on the property tax reductions. But it looks like Vos’s counterpart in the other house of the Legislature has his group going in a different direction.

The same day, Senate Majority Leader Devin LeMahieu, R-Oostburg, said Senate Republicans had a "great caucus" on the issue, working on "fine-tuning" where its members stand.

LeMahieu told CBS 58 earlier in the day that "in order to do anything for school funding or running it through school aids, we're going to need to repeal the 400-year veto."

In addition, LeMaheiu and other Senate Republicans have a different idea for how to use the surplus funds.

Senate Bill 1 will provide Wisconsin families with rebate checks up to $1,000.

Madison- Senate Majority Leader Devin LeMahieu (R-Oostburg) made the following statement regarding the introduction of Senate Bill 1, which will provide married-joint income tax filers with a $1,000 income tax rebate and provide all other filers with a $500 income tax rebate:

via GIPHY

I’m not going to give you the spin LeMahieu is giving as to why, but I do have a question. Did Senate GOP staffers check out this post I made? (hilarious on multiple levels if true) :P

The income tax rebate bill is already set for a committee hearing on Thursday. It looks like the rebate would be based on who filed in Wisconsin in tax year 2024, and here’s how people would get that money.

The department of revenue shall identify the taxpayers who are eligible to receive a rebate...and the amount of payment due each taxpayer. The department of revenue shall certify the allowable amount of the rebate to the department of administration for payment by check, share draft, or other draft drawn from the appropriation account under s. 20.835 (2) (cd). The department of administration shall make the payments under this paragraph no later than September 15, 2026.

The department shall establish procedures for taxpayers who do not receive a rebate or receive less than the full amount for which they are eligible under this subsection to file a claim for payment by December 31, 2026. The department of revenue shall establish a portal on its Internet site for these individuals to file a claim for payment. No taxpayer may make a claim for a payment under this paragraph after December 31, 2026.

Getting the payments out by Sept 15 would mean Wisconsinites would get a benefit faster than having to wait for the effect to show up on their property tax bills in December, which is why I’ve advocated for this type of rebate - although I’d base it on 2025 tax bills vs 2024, unless that proves too difficult to get that information lined up in the time period between May 2025 and Sept 2025.

The drawback of using a rebate is that none of the state funding goes to school districts, which doesn’t solve the concern about how to keep increasing amounts of property taxes from paying for K-12 education. Which means 2026’s property taxes would still be set up to be high, and it still (correctly) portrays Senate Republicans as a group who don’t want to fund community schools.

It’s interesting to see Senate GOPs go out on this island of income tax rebate in opposition to both the Assembly GOP and Governor Evers, and I’d encourage Senate Dems to try to split the difference – agreeing with some kind of income tax rebate while also adding some state funding to K-12 schools. It’s also always fun to see Dweeby Robbin’ Vos get faced by his own party members in the Senate, and that’s all the more reason for Dems to get their names on possible tax relief packages, to be seen as a part of the solution while the GOPs flail around.

With maybe a month to go in the session before the GOP adjourns for the Legislature’s 10-month paid vacation, let’s see if something gets worked out. And let's see if the WisGOPs wreck the chances of any tax relief by fighting amongst each other, which would make it even more likely that they’ll have no power at all at the Capitol this time next year.