Dem Gov. Tony Evers and GOP legislative leaders reached a $1.8 billion deal to pump more money into schools, drive down property taxes, send Wisconsinites a rebate, plus exempt cash tips and overtime from the state income tax.

The state previously had a projected surplus of nearly $2.5 billion at the end of the 2025-27 budget. The price tag of the deal would be offset somewhat by new revenue projections from the Evers administration suggesting the state could take in $300 million to $350 million more in tax collections than what was previously projected.

The election-year deal includes the money for education that Evers wanted, the property tax relief that Assembly Republicans sought and the rebates that Senate Republicans demanded be part of any deal.

The topline numbers include:

  • $600 million for K-12 education. Half of that would go to special education to boost reimbursement rates, while the other half would reduce how much districts collect in property taxes for the 2026-27 school year.
  • $50 million to reduce property taxes collected by the state’s technical colleges.
  • $150 million for direct payments to Wisconsinites of $600 per married couple and $300 per individual filer.

Evers included a provision in his budget to exempt cash tips from the state income tax. Republican lawmakers, though, scrapped that and passed standalone bills with exemptions on tips and overtime. Evers then vetoed both bills as talks continued to reach a deal on the state’s projected surplus, which had been $2.5 billion when the budget was signed last year.

The Joint Finance Committee will take up the deal tomorrow with both houses voting on it Wednesday.