The State Assembly met in special session on May 13 to vote on returning a large portion of the estimated $2.4 billion state surplus to the state’s taxpayers.  State Rep. Dave Armstrong (R-Rice Lake) joined members from both sides of the aisle to approve this historic measure.  However, the State Senate rejected the proposal shortly afterward.

“Years of responsible Republican budgeting, combined with larger-than-expected revenues, meant that Wisconsin is sitting on an enormous surplus,” Representative Armstrong explained.  “Republicans see surpluses and think people are being taxed too much, while Democrats see surpluses and think the state is spending too little. 

“However, after months of negotiations with Republican leadership, Governor Evers at least apparently saw the light and realized that returning tax dollars to the people is the right thing to do.  While some Assembly Democrats joined him in supporting this proposal, it was illuminating to get glimpses during the floor debate of what their colleagues really think of his leadership now that he’s a lame duck.”

The proposal, Special Session Assembly Bill 1, as amended by Assembly Amendment 1, included several tax relief provisions:

  • Tax rebates, up to $300 for single filers and up to $600 for joint married filers, for taxpayers who filed state returns and owed taxes for 2024 – a transfer of about $870 million back to Wisconsin residents.
  • Permanent tax deductions for qualified tips and overtime payments – a reduction of more than $230 million in the first year.
  • $302 million in property tax relief through increased state investment in public schools.
  • $50 million in property tax relief through increased state aid to Wisconsin’s technical colleges, with a matching reduction in the technical colleges’ taxing authority.
  • Lower eligibility threshold for the Veterans and Surviving Spouses Property Tax Credit, to a disability rating of 80%. 

In addition to tax relief, SS AB 1increased Wisconsin’s investment in special education, covering 42% of costs in 2025-2026 and an estimated 50% of costs in 2026-2027.  The amended bill also included $20 million for disaster assistance grants.

The Assembly passed SS AB 1 61-32, but the bill failed in the Senate on a 15-18 vote, so any further proposals for tax relief will now have to wait until the 2027-2028 legislative session.

“It’s frustrating that so many Democrats – and a few Senate Republicans – were unable to recognize the value in this proposal, and voted to deny Wisconsin taxpayers meaningful relief,” Representative Armstrong said.  “Was SS AB 1 perfect?  No, but with a Republican Legislature and a Democratic governor, there’s only so much that either side is realistically going to be able to get, and I’d rather that Wisconsin residents get some relief than no relief, which is where we are now thanks to the Senate’s actions. 

“The 2025-2026 legislative session could have ended with a bang, but instead it’s ending with a whimper.  That said, I hope this experience paves the way for successful tax relief next session.”