An empty high school classroom. (Dan Forer | Getty Images)

Department of Public Instruction Superintendent Jill Underly is proposing Wisconsin increase state public school funding by at least $3 billion, including by increasing the special education reimbursement for public schools. 

Underly outlined the proposal Monday, and it comes as Wisconsin schools have been increasingly turning to voters to help fund rising costs. Last week, Wisconsin voters passed over 78% of school referendum requests. 

“Wisconsin’s public schools have been asked to do more with less for too many years — and the upcoming biennial budget presents a critical opportunity to make meaningful change and support the future of our kids,” Underly said in a statement announcing the proposals on Monday. “My budget proposal reinvests in public education and upholds the responsibility of our state: To ensure our schools have the resources they need to ensure the success of our kids. By providing sustainable funding to our public schools and creating new, innovative ways to meet families’ needs, our educators can continue providing high-quality education to all kids.

The proposal includes raising the state’s reimbursement for special education costs to 75% in 2026 and to 90% in 2027 — providing about $2 billion to schools over the biennium. Private voucher schools in Wisconsin already receive a 90% reimbursement rate. 

The budget request  also includes indexing school revenue limits to inflation — restoring a principle that was last used in  2009-10 — and  increasing public schools’ revenue limits by $425 in fiscal year 2026 and by $437.75 in fiscal year 2027 — providing an additional $1 billion over the biennium. 

At the same time, Underly said her proposal would limit school districts’ property tax increases to an average of 1.5%.

DPI Communications Director Chris Bucher explained in an email to the Examiner that the agency is “proposing both increasing the revenue limit, and then funding that with state dollars.”

“Funding the revenue limit increase has the practical effect of preventing schools from increasing property taxes, due to the revenue limit increase, unless they go to referendum,” Bucher said. “It’s not just a hope and a wish. Schools are effectively prevented from increasing property taxes due to the revenue limit by more than about 1.5% average over the biennium.”

Other proposals include expanding per-pupil categorical aid program payments from $750 to $800 in 2026 and to $850 in 2027, as well as providing an additional 20% for students in poverty; providing $20 million for the out-of-school-time grant program; and reimbursing local education agencies for unaided costs of providing mandated special education services to children with disabilities in early childhood education. 

Over the last month, Underly has also announced other proposals, including investing nearly $60 million to help school districts resolve staffing challenges and retain teachers, $42 million proposal to support early literacy initiatives, $311 million for school nutrition and $304 million to support Wisconsin youth mental health.

Democratic lawmakers responded positively to the proposals, saying they will benefit students. 

“For the love of Wisconsin kids, teachers, and schools, let’s get it done,” Rep. Robyn Vining (D-Wauwatosa) said. 

Sen. Kelda Roys (D-Madison), who is a member of the Joint Finance Committee, encouraged her colleagues to support and help pass the proposal in a statement. 

“Public schools are struggling under harsh state levy limits, forcing districts to repeatedly go to referenda to recruit and retain great teachers and to give every student a good education,” Roys said. “This is a budget proposal that finally puts our kids and our schools first, while helping take the burden off of local taxpayers.”

Whether the proposals will actually become law is unclear. The Legislature will have a larger share of Democrats in the upcoming legislative session after the first elections under maps drawn to be more competitive for both parties. Democrats have said that the change will lead to more negotiations with Republican lawmakers over the shape of the budget. 

However, Republicans still hold a majority of seats in both chambers, with a 54-45 GOP majority in the Assembly and an 18-15 majority in the Senate.

Leaders of Senate and Assembly Republicans have said given the state’s budget surplus that tax cuts will be a top priority for them.

Update: This story was updated Tuesday with additional comment from DPI.