This report is republished by agreement with the Racine County Eye, where it originally appeared.

Democratic State Reps Angelina Cruz of Racine and Christian Phelps of Eau Claire are proposing a new plan aimed at lowering property taxes while increasing funding for public schools by using a portion of the state’s budget surplus.

Cruz hosted a media roundtable in Racine Wednesday, March 25, alongside State Rep. Greta Neubauer (D-Racine), during which they talked about the plan with the superintendents, school board presidents, and parents from Racine and Kenosha Unified School Districts.

The proposal comes as Wisconsin is set to have a $2.5 billion surplus in its 2025–27 biennial budget, according to lawmakers. Cruz and Phelps’ bill would allocate about $1.3 billion of that surplus toward education.

Both the Assembly and the Senate have held their last regular floor sessions for the 2025-26 term, so the proposal is unlikely to get a vote this year.

According to a statement released by Cruz on March 20, the proposal would increase general school aid and raise the state’s reimbursement rate for special education costs. The goal is to reduce the financial burden on local property taxpayers while improving stability for school districts.

“The proposal would use a portion of the state’s surplus to increase general school aid and raise the state reimbursement rate for special education costs, helping ease pressure on local property taxpayers and providing greater financial stability for school districts,” the release states.

Under the plan, general school aid would increase by $445,949,400 for the 2026–27 school year. By shifting more responsibility to the state, the bill would reduce reliance on local property taxes, which have been rising as districts struggle to cover costs.

Kenosha Unified Superintendent Jeff Weiss noted that property taxpayers have already seen increases of up to 29% on their tax bills.

A key component of the proposal focuses on special education funding.

Cruz and Phelps recommend raising the reimbursement rate to 60% for both the current and upcoming school years, with funding guaranteed to cover that percentage.

“While this still falls short of the level of support many districts need, increasing reimbursement to 60% would provide critical relief for public schools,” Cruz said. “It would help stabilize school district budgets and reduce the need for operating referendums in communities across Wisconsin.”

School officials say education funding needed

Currently, many districts rely heavily on referendums to maintain staffing, programs and daily operations because of limited state support.

Racine Unified Superintendent Soren Gajewski emphasized the strain this has placed on communities.

“Once again, this community and Racine have stepped up to the plate and done everything they can to support their public schools,” Gajewski said. “But the problem is, we continue to have the cost of education and the revenue limits because the revenue coming in does not match, or isn’t even close.”

Gajewski also pointed to rising costs driven by inflation and contracts for services such as food, transportation, and electricity. About 18% of students in Racine Unified receive special education services, further adding to budget pressures.

In a public letter, Gajewski joined superintendents from Madison, Milwaukee, Kenosha and Green Bay in calling for increased state support. They specifically requested raising the special education reimbursement rate to 45% instead of the current 35%, along with additional general funding.

The issue of special education funding has been especially contentious. The state’s reimbursement rate was lowered this school year, according to the Department of Public Instruction, a change that Cruz’s and Phelps’ bill would reverse.

Kenosha Unified Board of Education President Mary Modder criticized the current system.

“With special education, we have people out in the public who are saying, ‘Well, you guys got a huge increase in special education’ without realizing that we really didn’t,” Modder said. “It’s kind of a bait and switch, and then we have to make up the difference.”

Local leaders say the lack of consistent state funding has forced districts to make difficult financial decisions.

Racine Mayor Cory Mason expressed frustration with what he sees as the state shifting responsibility onto local taxpayers.

“Year after year, we see the state walking away from its responsibility to adequately fund education and putting more and more of it on local property taxpayers,” Mason said. “There’s no future where we’re successful without great public schools.”

Cruz said the proposal is intended to address what she described as years of underinvestment in public education.

“We have been living with the consequences of long-term disinvestment in our public schools,” she said. “This legislation is a step toward correcting that. By increasing the state’s investment in public education, we can support our schools while delivering meaningful relief to property taxpayers.”

This report includes additional information from the Wisconsin Examiner. 

Reports republished from the Racine County Eye are not available for republishing elsewhere.

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