Higher Wis revenues help in 2026. But GOP Tax Scam will cost state more in 2027 and beyond

We got the final numbers for Wisconsin tax revenues, and they exceeded the already-rosy possibilities the Evers Administration gave this Spring.

General purpose revenues (GPR) increased 3.4% in fiscal year 2026 (FY26) to $23,132.2 million. This is 2.0% more than the Legislative Fiscal Bureau’s modified January 15, 2026 estimate of $22,681.4 million.

So on the revenue side, it’s $450 million more than projected by LFB, and more than $1.2 billion above what was baked into the 2025-27 budget.

Based on LFB’s breakdown of the K-12 and tax cut plan that was shot down by the State Legislature, this means there was $3.4 billion in the state’s bank account on June 30 if expenses end up meeting projections. And if we assume revenues grow in FY 2027 by the same 1.8% that LFB projected back in May, there would stil be just under $3.3 billion at the end of the budget cycle on June 30, 2027.

But that’s a big IF on the expense side. We know that the state is projected to need another $322 million in funding for Medicaid to get through the budget cycle that ends next June 30. In addition, inflation is running higher than the 2.9% for 2026 that was projected by LFB when the budget was put together in Spring 2025. While the higher revenues help state budgets in the short term because of higher sales taxes on higher-priced items and excessive profits for companies, expenses will eventually increase for programs such as Medicaid and other costs of services (and already have in some cases).

However, the current strong revenue numbers could give a chance to revive the K-12/tax cut deal between Evers and WisGOP legislative leaders that was tanked in the State Senate this May. And Joint Finance Co-Chair Rep. Mark Born told WisPolitics that he'd be open to doing so. So let’s go back to the price tags of the items in that deal.

$300 single/$600 married couple income tax rebate $870 mil
Special Ed aids $315 mil
K-12 aid to cut property taxes $302.5 mil
Tech College property tax cut $50 mil
Additional charter/choice aid payments $16.3 mil
Income tax exclusion on OT premium $179.9 mil (then $148.1 mil a year after that)
Income tax exemption for tips $52.9 million ($48.9 mil a year after that)

I still favor a one-time tax rebate . Although I don't mind the idea of a one-time bump in Special Ed aids, as it would be very hard to justify taking that away in the next budget.

I'd add that one complication about any K-12 aids being put in at this time of the year is that the school year has now started, and there are already 61 operating referenda questions scheduled for November, which might make for an odd situation if these schools are getting the aids that would lessen the need for a referendum for added resources.

Also remember why Tom Tiffany opposed the deal in May. Because he wanted more money left over for permanent income tax cuts that lower revenues year after year. And he wants to handcuff K-12 schools even further.

Tom Tiffany said during an interview on News Talk 1130 WISN on Tuesday that he would not vote for the package that would send $600 million more to schools in the state, in exchange for no taxes on tips or overtime, and direct refund checks to taxpayers across the state.

“I would not vote for it,” Tiffany said.

He blamed Gov. Tony Evers for offering Republicans a bad deal.

“He could have put in here the repeal of the 400-year property tax increase, and he did not,” Tiffany added. “All he wanted in there for the relief was a ‘sugar high’ for a year.”

Yes, Tiffany is deceiving about Evers' veto that allowed K-12 schools to raise resources at a still-insufficient $325 per student. The large number of referenda shows that's likely not enough and that the state needs to do its part to help in both resourcing the schools and in leveling off school property taxes. But under Tiffany and WisGOP, that clearly would not going to happen, so vote accordingly.

One last variable to consider - Tom Tiffany and his fellow Republicans in Congress set a time bomb that goes off after this November's midterms that goes beyond the $72 million in added FoodShare costs that the State of Wisconsin is already taking on due to changes in Tax Scam 2.0. And it'll either make Medicaid costs go much higher, or cause a lot of Wisconsinites to be in need.

Rural hospitals closing or shutting down key departments like obstetrics will be one of the biggest stories of 2027. Democrats need to make it one of the biggest stories of the next two months.

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— 🗽LOLGOP🗽 (@thefarce.org) August 29, 2026 at 6:14 AM

Nonprofit hospitals just finished three straight years of improving margins, helped along by Democrats strengthening the ACA, strong patient volume and new tools. Fitch Ratings says that streak is over. The ratings agency called Trump’s bill the “dominant near-term threat” to hospital finances, with Medicaid enrollment cuts, work requirements, and payment caps set to hit starting in 2027. Public Citizen reviewed financial records from nearly every hospital in the country and found that 446 were at high risk of closing or cutting services due to the law’s roughly $1 trillion in Medicaid cuts. The hospitals most exposed sit in blue states like California, New York, Illinois, and Washington, and the damage falls hardest on Black and Latino communities....

Rural America gets hit hardest of all. Nearly 200 rural hospitals have closed since 2005, and more than 400 others, over a fifth of all rural hospitals left standing, are at risk right now. New paperwork requirements and eligibility checks every six months instead of every year are expected to knock 1.5 million rural Medicaid recipients off their coverage. A new cap on state payments to hospitals will speed up closures even further. (Wisconsin is less exposed to this due to Gov Evers and the Legislature working through the night to increase the state's hospital assessment before Tax Scam 2.0 was passed).

States don’t get to run a deficit the way Washington does. When H.R. 1 phases down the provider taxes states use to fund their share of Medicaid and caps what they can pay hospitals directly, states have to make up the gap in the same budget year, not the same decade. Colorado already cut Medicaid provider rates and capped payments to family caregivers to close a $1.5 billion gap. Montana stopped covering doula services. Oregon ordered every state agency to find cuts. This is the same law terrorizing the same states twice (at least), once through the hospitals and once through the statehouse.

So it might make sense to hold onto more surplus funds into the next budget, because Donald Trump. Tom Tiffany and other Republicans are going to force the state to spend more money due to Tax Scam 2.0.

Personally, I'd be OK with one-time income tax rebates at this point, and have them go out in October as an advance to help Wisconsinites pay the higher school property taxes that Republicans have caused due to their lack of state funding. I'd add in the special ed funding and/or Tech College funding (I think Tech Colleges should be state-funded anyway), as those are items that are going to be very hard for either side to want to give up on, no matter what happens in November.

Then I'd bank the rest (around $2 billion as it stands today) because we don't know how bad and costly things are going to get under the last 2 years of Trump/Vance/other. But it seems likely that it'll be a sizable cost for both everyday Wisconsinites and our state government, and WisGOP Congressmen like Tom Tiffany have only themselves to blame for that.