With state revenues coming in higher than expected, GOP gubernatorial nominee Tom Tiffany vowed to return all of a projected surplus to taxpayers, while Dem rival David Crowley said he’d look at property tax relief while investing in schools and healthcare.

Those pledges came after the state Department of Revenue released preliminary figures yesterday showing the state collected $450.8 million more in tax revenue for 2025-26 than expected. Once final numbers are in, including expenditures for the fiscal year, it could push the projected surplus at the end of the 2025-27 biennium to $3 billion. 

That would provide the next governor with a healthy foundation for the next budget.

Crowley, the Milwaukee County executive, yesterday knocked Tiffany for supporting Republicans’ One Big Beautiful Bill Act, which he said cut money from Medicare and Medicaid. He also knocked Tiffany for supporting the end of enhanced subsidies for those who get their coverage through the Affordable Care Act exchanges.

“We need to make sure we are providing back to the community in some form or fashion,” Crowley said during a media gaggle in Wausau in response to a question from WisPolitics. “We know that there’s an affordability crisis.”

Tiffany, a GOP congressman from Minocqua, said in a statement the new numbers are more proof that Wisconsin is overtaxed and isn’t “a green light for Madison and David Crowley to spend more of your money.”

“As governor, I’ll return the entire surplus to taxpayers and deliver lasting tax relief for working families so you can keep more of what you earn year after year,” he said.

The higher-than-expected collections were driven largely by the income tax, with an additional $231.1 million in revenue than what the Legislative Fiscal Bureau had projected in January. 

Wisconsin also collected $83.9 million more in corporate taxes and $79.9 million in sales taxes than what the Legislative Fiscal Bureau had projected in January.

The DOR report didn’t provide any factors that contributed to the higher tax collections. Nor did an LFB memo sent to lawmakers summarizing the numbers.

LFB Director Bob Lang told WisPolitics no one economic factor spurred the higher collections. He noted strong income tax collections can often spur higher sales tax revenue as people have more money to spend.

The preliminary collection numbers are even better than what the Evers administration teased in May as the governor unsuccessfully pushed a $1.8 billion surplus deal that he hashed out with GOP legislative leaders. At the time, the governor’s office suggested the price tag could be offset somewhat by tax collections that were on track to come in $300 million to $350 million higher than what LFB had projected in January.

That $1.8 billion package failed in the Senate, when three Republicans from the majority and all 15 Dems in the minority voted against it. Assembly Joint Finance Co-chair Mark Born, R-Beaver Dam, said he is ready to come back to Madison again for another shot at tax relief if a deal can be reached that would pass both houses.

“Today’s preliminary revenue numbers are another sign of the strong financial position Wisconsin has built through years of responsible budgeting,” Born said. “Collections came in more than $450 million above estimates, and that strengthens the case for putting taxpayers first rather than simply growing government.”

In that January projection, LFB expected the state to finish the 2025-27 biennium with a gross balance of nearly $2.5 billion.  

Final numbers for 2025-26 will be released in mid-October as part of the state’s Annual Fiscal Report, which will also take into account departmental revenues and expenditures during the fiscal year.

DOR noted in its release yesterday those factors “will have substantial bearing on the final budget balance.”

Senate Finance Co-chair Howard Marklein, R-Spring Green, said he wasn’t surprised by the numbers after watching monthly collection reports that suggested the surplus would be larger than previously expected.

“I remain disappointed that we did not pass the bipartisan agreement to return money to hardworking taxpayers, reduce property taxes and help our schools,” Marklein said. “Our families and taxpayers could use the relief now.”