Legislative Democrats wary of surplus deal struck by Evers and Republican lawmakers

Two months after legislative Democrats put forth a proposal to use some of the state’s estimated $2.5 billion surplus to provide tax relief and extra funding for public education, Gov. Tony Evers and Republican leaders have reached a separate deal, one that doesn't appear to thrill Democratic lawmakers.

On May 11, the two sides agreed to invest $600 million in public education while providing $300 rebates for taxpayers who filed individually in 2024 and $600 for married couples. The rebate checks portion of the deal accounts for $850 million of the total cost of the agreement, tabulated at $1.8 billion overall.

Not all Democrats were on board with the behind-the-scenes deal, with Kelda Roys warning it sets the state up for a fiscal crisis and doesn’t do nearly enough to make up for the gutting of public-school funding over the past 15 years.

The deal also includes $350 million in property tax relief as the state applies more to school funding. Almost every school district in the state has sought additional property tax funding via referendums to cover Republican cuts to school aid since the GOP took power in 2011.

Furthermore, the agreement permanently exempts income taxes on cash tips and overtime pay beginning in the 2026-27 fiscal year.

The next step is for the Joint Finance Committee to review the proposal on Tuesday, with votes in the Assembly and the Senate coming as early as Wednesday. 

Of the education funding, $300 million will increase special education reimbursement, which is currently at around 35 percent for public schools. That influx of money would bring the reimbursement rate to close to 50 percent, still well below the private-school reimbursement rate of 90 percent. The other $300 million will come in the form of a general school aid increase.

Any deal, said Roys, the gubernatorial candidate and state senator from Madison, should focus entirely on “our kids, from whom (the surplus) has been stolen by 15 years of GOP budgets.”

She went on to accuse Vos of using the agreement as an election-year gambit to save Republican seats, calling it a bribe after 15 years of inaction on public education and of steadfast refusal to use any of the surplus to help address other state needs over that time.

“The latest deal is the height of fiscal irresponsibility,” she posted on social media. “It spends a projected ‘surplus’ before it’s in the bank even though that projection was estimated before Trump’s attack on Iran that disrupted our economy and caused gas prices to skyrocket.”

In March, Democrats proposed $1.3 billion in additional school funding, which included a bump in special education reimbursement to 60 percent, and a freeze on property tax increases as the state assumed more of the burden of state aid to schools.

“For decades, whenever Democrats win power, we have to fix the fiscal messes and economic calamities Republican politicians created,” Roys said.