Senate Majority Leader Devin LeMahieu (R-Oostburg) said during a press conference ahead of a Senate floor session Thursday that Evers’ office has had lawmakers’ plan for a tax cut since March and that they have asked Evers for a list of specific items that he would want in the budget to agree to cutting taxes. (Photo by Baylor Spears/Wisconsin Examiner)

State budget negotiations were top of mind for lawmakers Thursday, even as the Senate took action on a variety of bills, with Senate Republicans calling for a meeting with Gov. Tony Evers and Democrats calling on Republicans to support Evers’ budget requests. 

The Wisconsin Legislature is in the process of writing the next biennial budget, and Republicans are intent on passing a tax cut this session after failing to get Evers’ approval for a proposed cut last session.

Republican leaders have said they want an agreement on the tax cut before allocating spending to other priorities, and are waiting for Evers to schedule an in-person meeting with them to work it out.

Senate Majority Leader Devin LeMahieu (R-Oostburg) said during a press conference ahead of a Senate floor session Thursday that Evers’ office has had lawmakers’ plan for a tax cut since March and that they have asked Evers for a list of specific items that he would want in the budget to agree to cutting taxes. However, LeMahieu said they haven’t been given any details in the last several weeks.

“Speaker Vos and I provided the governor with a series of times [to meet] into next week as a last-ditch effort to preserve these good faith negotiations,” LeMahieu said. “I hope sincerely that he accepts… one of those dates next week. It’s imperative that we meet by the end of next week at the latest to stay on schedule to pass a budget by the end of the fiscal year. It’s as simple as that. Time’s ticking… and if we’re going to work to get a budget passed, we need to meet with the governor next week.”

LeMahieu said GOP tax goals include exempting income for retirees in Wisconsin to encourage them to stay in the state and increasing the second-tier tax bracket, similar to a bill the governor vetoed last session. LeMahieu said the new tax bracket won’t reach as high up the income ladder as the vetoed one.

Assembly Speaker Robin Vos (R-Rochester) said on Tuesday that work on the budget is “on pause” until legislators get an in-person meeting with Evers and that their preferred option is “to be able to get an agreed upon tax cut so that we know we have X dollars to invest in schools and health care and all the other things that are important.” 

LeMahieu said that the latest Legislative Fiscal Bureau report would also be pivotal in negotiations because it will help lawmakers understand “what kind of tax cut we can afford” and “what kind of other investments we can afford.”

The Legislative Fiscal Bureau projected in the fiscal estimate released Thursday afternoon that the state will finish the 2023-25 fiscal year, which ends June 30, with a $4.3 billion budget surplus, which is slightly higher than the estimate from January. However, the estimate also found that tax collection will likely be lower over the next two years.

“While we are not surprised by these new estimates, we remain cautious as we work to craft a budget that invests in our priorities, funds our obligations, and puts the State of Wisconsin in a strong fiscal position for the future,” Joint Finance Committee Co-chairs Rep. Mark Born (R-Beaver Dam) and Sen. Howard Marklein (R-Spring Green) said in a statement. 

The lawmakers said that the estimates are a sign that they need to continue to approach the budget in the same way they have in the past. They also called on Evers to “take these revenue re-estimates seriously” and to “come to the table with legislative leaders and work with us to craft a reasonable budget that works for Wisconsin.” 

Democrats on the Joint Finance Committee said in a statement that the estimate is a sign of the decline the economy could face due to Trump administration tariffs. 

“Now, more than ever, Wisconsinites are struggling to put food on the table and maintain a roof over their heads. This projection shows it’s going to get even worse, especially when our communities start to feel the direct impact of the Trump regime’s trade war around the globe,” the lawmakers said. “Together, we need to ensure Wisconsinites have the resources to get through the chaos and uncertainty that lies ahead.” 

Ahead of the floor session, Democratic lawmakers called attention to Evers’ budget requests, saying that the various non-budget bills the Senate took up Thursday don’t address the issues that Wisconsinites are most concerned about. 

“It’s been 87 days since [Evers] has introduced his budget. It invests in essential priorities — K-12 funding, child care education, mental health, helping the environment and putting much needed funding in the university system. What have Republicans done in those 87 days? Well, they stripped essential items in that budget….” Senate Minority Leader Dianne Hesselbein (D-Middleton) said at a press conference. “What the Legislature should do is debate the budget.”

Wisconsin Republicans on the Joint Finance Committee cut over 600 items from Evers’ proposal last week , saying they were taking the budget “back to base.” 

Sen. LaTonya Johnson (D-Milwaukee) noted that lawmakers recently traveled across the state to hear from Wisconsinites about their priorities for the state budget and then failed to act on any of those priorities. She then listed several bills on Thursday’s calendar. 

“We’ve got a bill on changing the name on the name-change process for people convicted of violent crimes; a bill that gives big businesses their own private courts; a bill tweaking surcharges for electric vehicles,” Johnson said. “I’m not saying that these bills aren’t important to someone, but we sure didn’t hear about these issues when we traveled across the state at our listening sessions.” 

Johnson said that lawmakers need to ask if the bills “meet the moment” the state is facing. 

“Do they lower the cost for hard-working families? Do they help us hire nurses, teachers, child care providers? Do they clean our water and keep our streets safe [or remediate] lead contaminated classrooms?” Johnson asked. “If the answer is no, then why the hell are we here?” 

Democrats, including Hesselbein, have said they think Democratic votes will be necessary to pass a budget, but they don’t necessarily expect to be in the room for budget negotiations between legislative Republicans and Evers.

Asked if Democrats are requesting to participate in a sit-down between Evers and Republicans, Hesselbein said she is “in consistent contact with Gov. Evers and his administration, and those conversations have been both before and moving forward.” 

Pressed on whether she wants to be in the room when the governor and Republicans meet, Hesselbein said “I’ll be honest, sometimes it’s hard to get all of us in the same room because of timing and schedules and things like that.”

Some of the bills that the Senate took action on Thursday include: 

• SB 33, which would make it a crime to share nonconsensual “deep fake” nude images and was introduced in reaction to the growing use of artificial intelligence to make fake images. It passed unanimously. 
• SB 125, which would require the Public Service Commission to conduct a study for a place to locate a nuclear power plant. It passed with bipartisan support from 28 Senators. Four Democrats and Sen. Steve Nass (R-Whitewater) voted against the bill. 
• SB 96, which would exempt electric vehicle charging stations at a person’s home from the electric vehicle charging tax. It passed unanimously. 
• SB 146, which would bar someone convicted of a violent crime including homicide, battery, kidnapping, stalking, human trafficking and sexual assault from changing their name, passed 18-15 in a party line vote.
• The Senate also passed AB 73 in an 18-15 vote. The bill would create a specialized commercial court meant to handle business cases. It comes after the state Supreme Court discontinued a pilot program last year.

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Sen. Howard Marklein (R-Spring Green) and Rep. Mark Born (R-Beaver Dam) told reporters that they would be starting from “base” with the budget. (Photo by Baylor Spears/Wisconsin Examiner)

The Joint Finance Committee kicked off its work on the next Wisconsin State Budget Thursday by eliminating over 600 items from Gov. Tony Evers’ sweeping budget proposal, saying they would start from “base” and his budget had too much “irresponsible” spending. Democrats criticized Republicans for blocking all of Evers’ proposals without presenting a plan of their own to address the concerns of everyday Wisconsinites.

The committee spent last month hearing from members of the public, many of whom called for investments in public education and health care, and from some agency heads, who have defended Gov. Tony Evers’ budget requests. The state has a $4 billion budget surplus it’s considering, and Evers proposed the state tap those funds and raise income taxes on the wealthiest Wisconsinites to fund his proposals. 

The list that lawmakers eliminated from the budget bill spanned about 20 pages and includes a new 9.8% income tax bracket for high-income earners, Medicaid expansion, nearly $500 million for the Child Care Counts program, marijuana legalization and taxation, $125 million to create a grant program to address PFAS, $200 million to address the replacement of lead pipes and other provisions to help address lead poisoning and many provisions related to public schools including free school meals, a “grow your own” teaching program and ensuring access to menstrual supplies in schools, funding for the Office of School Safety and a provision to cap participation in the state’s voucher programs.

Ahead of the budget meeting, committee co-chairs Sen. Howard Marklein (R-Spring Green) and Rep. Mark Born (R-Beaver Dam) told reporters that they would be starting from “base” with the budget, meaning removing all of the items and taking the budget back to the one in place for 2023-2025. 

Born said legislators are accustomed to “the way we have to manage the governor’s executive budgets.” Since Evers took office in 2019, Republicans have kicked off every  budget cycle by removing all of his proposals.

“Unfortunately, [Evers] sends us an executive budget that’s just piles full of stuff that doesn’t make sense and spends recklessly and raises taxes and has way too much policy,” Born said. “So, we’ll work from base and the first step of that today is to remove all that policy… and then begin the work of rebuilding the budget.”

Responding to Democrats’ criticism  that Republicans are removing items that are popular with the public, Marklein said they should draft separate bills and use the regular legislative process to advance those ideas. 

“I can point to things in the budget bill that we’re going to pull up that I like… and we’re pulling that out as well. It’s a policy,” Marklein said. “It’s got nothing to do with the budget.” 

Born noted that there are also other ways that lawmakers could address issues of concern apart from Evers’ suggestions, saying the removal of items “doesn’t mean that when we build this budget over the next couple of months, we won’t impact those areas in positive and significant ways.”

“The governor has one idea on how to fund child care or one idea on how to impact mental health,” Born said. “There are other ways that we can do that in current law and current budget operations by inserting more money in things that I can most likely see us do.”

Marklein also noted that there could be some changes to how they go about drafting the budget this year following the state Supreme Court upholding Evers’ partial veto in the last budget.

“I anticipate that you’re not going to see too many references to digits, years anymore,” Marklein said. “My guess is that our drafting attorneys are going to recommend that you spell out those years, and those dates in the budget.” Born said the decision could also affect the education budget because there are increases already “baked into the cake.” 

Evers slammed Republicans for gutting his proposal, saying that they are refusing to help Wisconsinites.

“The most frustrating part for me as governor is that Republicans consistently reject basic, commonsense proposals that can help kids, families, farmers, seniors and Wisconsinites across our state, all while Republicans offer no real or meaningful alternative of their own,” Evers said. “Republicans talk a lot about what they’re against, but not what they’re for.”

During the meeting, Democrats proposed keeping 19 items in the budget across a handful of motions that touched on certain issue areas, saying they hoped they could carve out some spots for agreement. 

One would have placed $420 million back in the budget to fund the Child Care Counts program, as well as several other child care related measures. 

Sen. LaTonya Johnson (D-Milwaukee) said Republicans are “willing to pull out really, really important items” and said the child care proposals are essential, warning that money for the Child Care Counts program is expected to expire in June. 

“We are at risk of losing 87,000 [child care] slots… The fact that these things are being pulled out of the budget today and as of today, there is no mention or discussion of a replacement plan for something as important as this,” she said, is creating uncertainty among Wisconsinites and exacerbating a crisis. 

“Our children deserve quality services. Our families deserve affordable rates,” Johnson said. 

Another motion would have placed Medicaid expansion back in the budget. Wisconsin is one of only 10 states that haven’t accepted the federal expansion, which would allow coverage for those up to 138% of the federal poverty line. 

“Families are struggling to afford the care they need, and we have an opportunity — and I would argue an obligation — to do something,” Andraca said.

Andraca noted that Congressional Republicans, including Wisconsin U.S. Sen. Ron Johnson, are considering cuts to the Medicaid program as they aim to extend the 2017 tax cuts from President Donald Trump’s first term.

“We heard how people are fearful of cuts to the programs that they rely on, and they are forced to make increasingly hard choices between groceries and prescriptions,” Andraca said. “Are you still willing to turn your backs on the people who entrusted us to vote for their best interests? Honestly, our constituents deserve better than this.”

The final proposal from Democrats would have kept items in the budget related to veterans including tax credits for veterans, funding for a veterans’ mental health program and for the Wisconsin Veterans Museum as well as an item to designate Juneteenth and Veterans Day as holidays. 

Rep. Tip McGuire (D-Kenosha) said he hoped they could agree on not making veterans’ lives harder.

“I recognize that it’s sort of the whole brand of the Republican party right now is to make everyone’s life a little bit more difficult,” McGuire said. “Certainly, it’s harder to travel in this country, It’s harder for people to access health insurance, it’s harder for people to afford college or go to college or manage their student loans. It’s harder for people to afford groceries and there may even be a question of what you can have full shelves soon… I know it’s your whole brand to make people’s lives harder, but I think we can all agree… [veterans] should still deserve some support.” 

Republicans rejected each motion.

McGuire doubled down on his point, saying that Republicans’ opposition to supporting even smaller parts of Evers’ proposal is a sign that they don’t want to help the average person.

“People are struggling and it is a challenging world and the one thing we should not be doing the one thing that nobody votes for their legislator to do is to make their life harder,” McGuire said. “Yet, that is all we are seeing out of the Republican party right now. That’s all we see out of the federal Republican party and frankly the Republican party here,” McGuire said, noting that Republican lawmakers recently passed legislation that would place additional restrictions on unemployment benefits.

“You’re making things less affordable and more difficult for regular [people] and that’s bad and we shouldn’t do it,” McGuire said.

Marklein said he was “glad we’re going back to base” because Evers’ budget proposal included a 20% increase in spending, an additional 1,300 positions funded by general purpose revenue and an increase in taxes. 

“When I talk to my constituents about the process, they are truly supportive of us not starting from this inflated budget that [Evers] put before us,” Marklein said, noting that Evers signed the last budget after they went through a similar process. “The idea that the door is closed on all these things is pretty ridiculous.” 

McGuire pushed back on Marklein’s comments, saying that lawmakers are pretending it is a “nice and friendly” process. 

“Part of the process that occurs here today is that not only do you remove the governor’s budget items, which make life easier for Wisconsinites, but then, you also prohibit anyone from ever discussing them ever again,” McGuire said. “And that’s really bizarre… This is a top-down totalitarian committee where we’re not permitted to discuss things past a certain point.”

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Parents with the "Learn in My Shoes" campaign including Amanda Sherman and Melanie Grosse stand before the Joint Finance Committee at a public hearing in West Allis. (Photo by Baylor Spears/Wisconsin Examiner)

Wisconsin’s special education reimbursement rate has been a concern for public school advocates for many years, but with districts’ reliance on school referendum requests increasing and federal support in doubt, the state’s reimbursement rate is quickly becoming one of the top issues this budget cycle.

Public school districts currently get about 30% of their special education costs reimbursed by the state. Advocates have called to increase that to at least 60% and as much as 90%, which is the amount that private and charter schools participating in the state’s voucher programs already get.

Tiffany Schanno, a Sheboygan parent, and Melissa Custer, a Grafton parent, have been showing up at state budget hearings and meeting in the Capitol to bring awareness to the experience of families seeking special education services in schools.

“We both have kids with disabilities who are trying to access special education, and we both experienced a lot of obstacles just trying to get our children accessible education, and the thing that we discovered is that it all comes down to funding,” Schanno said in an interview with the Examiner. “There’s only so much as far as resources to go around, so a lot of times families are competing against each other for services.” 

The pair put together a display — titled “Learn in My Shoes” — that included letters from families about their children’s experience receiving services and financial strains on schools. They placed the letters in a pair of children’s shoes. Custer said they thought having a visual representation and sharing stories would give lawmakers a “small taste” of the reality.

One letter described how educators and paraprofessionals have helped 12-year-old James “communicate with peers, become more confident and able to share more of who he is in meaningful ways.” James received important supports thanks to a “persistent” parent who said not all parents understand the process or know how to advocate for what their children need.  

“Because public school budgets are stretched to the point of hundreds of referendums over the past few years, families don’t ask for what they need because they don’t want to be thought of as burdensome,” the parent wrote. “Our family can find workarounds to an extent, but many others cannot. All children deserve an equal opportunity to a sound public education, and funding that keeps up with cost increases.”

Another parent said her son, who has Prader-Willi Syndrome, requires specialized support to navigate school safely and help with emotional regulation, transitions and physical safety. 

“Due to funding shortages, services are stretched thin… ” the parent wrote. “My children — and thousands of others across Wisconsin — deserve a chance to succeed, to feel safe, and to receive the support they need to reach their potential. Please make this a priority.” 

Schanno and Custer delivered the shoes and letters to lawmakers.

Schanno said some lawmakers expressed skepticism that additional state money would actually be used for special education. She said that isn’t a “valid argument” since federally mandated special education costs are carefully tracked.

“It’s not like you’re just giving a district a whole bunch of money and trusting them to use it for the right thing,” she said.

“Ultimately, what I took away from our visits… is that we have a long way to go with people understanding more about disability in general … and about the value in educating people who are different than they are,” Schanno said.

Proposals in discussion

Gov. Tony Evers proposed in his state budget that the reimbursement rate be raised to 60%. Republican lawmakers, including Sen. Howard Marklein (R-Spring Green), have acknowledged education funding as a top concern for  the public, and some, including Rep. Patrick Snyder (R-Weston), have said they want to put more money into  special education, but it is unclear what Republican lawmakers will support. 

As Republican lawmakers seek a deal on tax cuts, WisPolitics reports that spokesperson Britt Cudaback said Evers “expects Republicans to come to the table on investing in education at every level, among other critical priorities, in order to move forward.”

During the last budget cycle, lawmakers increased the special ed reimbursement rate, though Sen. Chris Larson (D-Milwaukee) notes it was a sum-certain rate, meaning there is a finite amount of money available, so the rate of reimbursement is not guaranteed as funds run low. The current reimbursement rate is hovering around 30%.

“School funding is complex” and special education funding is the “baseline that we absolutely should be doing,” Larson said. Special education funding in Wisconsin peaked at 70% in 1973 and at one point was as low as about 24.5% in 2018-19.

Larson supports increasing the rate to 90%. He said he thinks Evers’ 60% proposal is looking at it “from a political standpoint of what he perceives as what he wants to start the negotiations at in the budget with Republicans instead of what’s needed” and also taking into consideration other budget priorities. 

“That’s helpful and that would be significant and still double the percentage of what schools are currently getting, and I appreciate that…” Larson said. “I would hope that the governor would say 60% or veto.”

Larson also noted Evers’ budget would change special education reimbursement from sum certain to sum sufficient — so reimbursements at the set rate would be guaranteed.

Larson said he hopes his Republican colleagues support boosting the rate. 

“It still baffles me that some people think this is a partisan thing. Schools all over the state need help. The districts that are going to referendum are rural, they’re urban and they’re suburban. There’s nobody who’s special who is dodging this. Everybody is getting screwed over by the state,” Larson said. “I hope that the folks, the Republicans, who hold the narrow majority in the Assembly and in the Senate, would listen to their constituents who are saying, ‘Stop throwing this on us to cover your gap.’”

Special ed reimbursement could relieve referendum pressure

The discussion about school funding, especially for special education, comes as school districts have increasingly come to rely on referendum requests. Public school leaders, advocates and Democratic lawmakers have said increasing the special education reimbursement to at least 60% could help relieve some of that pressure.

Anne Chapman, research director for the Wisconsin Association of School Business Officials Association, said that increasing special education funding by a significant amount would allow school districts to not have to pull as much money from their general funds for the mandated services.

“You would see way fewer referendums, and you would see kids surge with better programs,” Chapman said. 

According to the Wisconsin Policy Forum, just this year there were 94 referendum requests across February and April elections with about a third of those representing “retry” efforts. As schools continue to rely on referendum requests to meet costs, Republican and Democratic lawmakers are seeking ways to change the dynamic, though the latter are focused on providing additional state funding, while the former are focused on implementing new restrictions. 

Rep. Christian Phelps (D-Eau Claire) said a memo from the Legislative Fiscal Bureau that compares recent referendum requests to the amount of unreimbursed special education costs illustrates the correlation. He said he asked for the memo after noticing a detail about the finances of the Eau Claire School District. 

“Eau Claire’s unreimbursed special education dollar amount was equivalent to the amount of money that they were asking for in their referendum just to not go too far into the red in their budget,” Phelps said, adding that he wondered “how widespread is this pattern?”

The 128 school districts that sought operating referendums in 2024, a record-breaking year, had over $488 million in unreimbursed special education costs for the 2022-23 school year, according to the Legislative Reference Bureau. The bureau’s memo also found that about one-fifth of the referendum requests in 2024 were equal to or exceeded special education costs that were unreimbursed by the state in 2022-23.

Some examples include: 

• Bangor School District had a recurring referendum request for $900,000 that failed in 2024. Its unreimbursed special education costs were $973,299 in 2022-23. 
• Edgerton School District had a $3,500,000 recurring request that passed. Its unreimbursed special education costs were $3,520,303. 
• Eau Claire School District had a successful $18,000,000 request. Its unreimbursed special education costs were $17,933,991. 

In some cases, a referendum request was for more than the unreimbursed costs, but even those were still close. Hamilton School District passed a $7,600,000 recurring referendum in 2024. The total of its unreimbursed special education costs was $6,128,870. 

“Funding special ed fully lifts all boats,” Phelps said. “When we have an underfunded special ed system, we are creating discrimination and disparity against students with disabilities. The services are mandated, so we’re paying for them one way or the other.” He added that right now, property taxpayers are making up for the state’s low reimbursement rate, and school districts are depleting their general funds. 

“Who loses when we’re stretching funds like that? Literally, every kid,” Phelps said, adding that funding special education through referendum isn’t effective because it’s also unpredictable. 

“When referendums happen, they either pass or fail, so now this district is better off than that district for no reason other than the fact that they both had to ask their voters for a referendum, and so we have disparities… when there is literally a pile of billions of dollars sitting around,” Phelps said, referencing the state’s $4 billion budget surplus. 

“It’s a gold mine in state budgeting to find something that you could do that just so clearly lifts all boats,” Phelps added. 

While Phelps said 60% is a compromise, he said the request from Evers is significant.

“It was not that long ago, public ed advocates were literally getting laughed out of rooms when they would ask for 60%,” Phelps said. “Now, the pressure is just too big, and you’re not getting laughed at for asking for 60[%] anymore.”

Derek Gottlieb, an associate professor at the University of Northern Colorado and senior research director for School Perceptions, an education research firm, also said the state could pick up more of the cost of special ed than Evers’ proposed 60%. 

“Even if the state didn’t touch revenue limits, even if the state continued to fail to raise just revenue limits upward to keep pace with inflation, we would see many, many, many fewer operating referendums if the state just paid 100% of special education expenditures…” Gottlieb said. “It is shameful, frankly, that the state has done less.”

Federal upheaval shadows special ed funding debate 

During a virtual public forum in April, Wisconsin Department of Public Instruction leaders said the discussion about federal and state special education funding are connected.

State Superintendent Jill Underly said as reimbursement rates remain low, local communities will continue to take on the cost of the federal- and state-mandated services. 

The special education reimbursement rate “is rather low — it’s 29% now, based on last year’s numbers — but the federal government also has a reimbursement rate, and it’s even lower,” Underly said during the session. “What this would indicate is that our schools are still going to provide the services, because that’s what our schools do. It’s just that they’re not going to be reimbursed fully for them, so the burden is going to shift more to the local school districts to compensate the costs.”

The comments come as the future of the federal government’s role in special education is in flux. The Trump administration has pushed to close the U.S. Department of Education, slashing its workforce and seeking to move “special needs” programs to the Department of Health and Human Services. 

During the forum, Deputy State Superintendent Thomas McCarthy noted that when it comes to federal funding “special education is one of the things that, by and large, everyone has said, we’re not going to reduce the states now.” 

“That is what I know today, ask me next week, it could be on the chopping block,” McCarthy said. Trump’s recent “skinny budget” proposal seeks to cut 15% from the education budget, but says it isn’t cutting funding for special education, though it does propose consolidating several Individuals with Disabilities Education Act (IDEA) grant programs into one. 

As the upheaval creates uncertainty, DPI leaders encouraged Wisconsinites to take the  opportunity to advocate for more funding. 

When the Individuals with Disabilities Education Act became law in 1975, the federal government said it would fund 40% of special education costs, Underly noted. The federal contribution now hovers around 10%.

“When they are arguing that they’re going to make things more efficient at the U.S. Department of Ed or in the federal government… What are they going to do with those savings? This would be a great example. Well, let’s authorize Congress to reimburse up to 40% of special education costs,” Underly said.

“Not only do we need the current level of funding, we need more funding… so be having that conversation with your federal elected officials [and] also be having it with your state elected officials,” Assistant Deputy State Superintendent Sara Knueve said. “We’re in the heat of that conversation about what’s the state’s reimbursement rate and they’re connected.”

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