July 1, 2025 6:30a
(WPR)---A tentative bipartisan deal between Gov. Tony Evers and Republican leaders in the state Legislature calls for billions in new spending on public schools, child care and state universities, along with income tax cuts worth more than $1 billion.
Evers announced the agreement early Tuesday. But as the saying goes, the ink hasn’t dried on the compromise.
In a statement, Evers said it’s contingent on his approval of any final changes to the two-year budget bill from the Republican-controlled Wisconsin Assembly and Senate.
Still, the deal with Wisconsin Assembly Speaker Robin Vos, R-Rochester, Wisconsin Senate Majority Leader Devin LeMahieu, R-Ooostburg, and Senate Minority Leader Dianne Hesselbein, D-Middleton, is notable.
Just last week, Republicans on the Legislature’s budget-writing committee cancelled a meeting as a small group of GOP senators said they wouldn’t support the budget in its current form. They preferred to blow past a June 30 budget deadline in order to keep state spending at current levels.
The text of the agreement has yet to be released, but Evers’ statement said it includes the largest increase to the state’s special education reimbursement rate in history, the largest increase to the Universities of Wisconsin in two decades and more than $330 million to support child care centers.
“I am grateful for the months of work that’s gone into getting us to this point today,” Evers said. “I want to thank Majority Leader LeMahieu, Speaker Vos, and Leader Hesselbein for being willing to come to the table so we could get a real and meaningful bipartisan budget done for Wisconsin. I look forward to signing a bipartisan budget that makes these critical investments in our kids, families, and communities across our state.”
According to the governor’s office, new spending under the state budget deal will include:
- Nearly a $1.4 billion boost in spendable revenue for K-12 schools, which includes raising the special education reimbursement rate for schools to 42 percent.
- Direct payments of $110 million for child care providers, along with more than $123 million aimed at reducing parents’ out-of-pocket expenses through the Wisconsin Shares child care subsidy program.
- $256 million in new spending on the Universities of Wisconsin, which includes a $100 million campus stabilization fund and more than $94 million to increase wages for UW employees.
- $840 million for UW building projects, which include upgrades to Science Hall at UW-Madison, a renovation of the Health Sciences and Northwest Quadrant complex at UW-Milwaukee, and a library demolition project at UW-Oshkosh.
- $150 million in new spending for the state’s Agricultural Roads Improvement Program.
- The elimination of a sales tax on household utility bills.
Under the deal, Evers’ office said income taxes for individuals will decrease by $600 million in each of the next two years, with 82 percent of the tax cut going toward people with adjusted annual gross incomes below $200,000.
Retirees age 67 and up would also be able to exclude up to $24,000 in retirement income from state income taxes. Last year, Assembly Republicans passed a tax cut proposal that would have exempted up to $75,000 in retirement income for those 65 and older, a proposal that Evers vetoed.
Deal includes bipartisan effort to stabilize Medicaid
In a bipartisan effort to get ahead of federal cuts to Medicaid, the budget deal would increase the state’s Wisconsin Hospital Assessment fee from 1.8 percent to 6 percent of net patient revenues. Those funds are used to bolster the state’s medical assistance trust fund and make supplemental payments back to hospitals.
Under the agreement, 30 percent of the money generated by the increased assessment rate will go into the trust fund, which Evers’ office states will result in more than $1 billion in new investments to Wisconsin hospitals.
“Provisions included in versions of federal reconciliation legislation could prohibit or limit this type of policy change in the future,” the governor’s statement said. “The 2025-27 Biennial Budget may be the last opportunity Wisconsin has to make this policy change, which would efficiently use federal funding to increase hospital reimbursement and decrease the GPR [general purpose revenue] cost of the Medicaid program based on these potentially imminent federal law changes.”
The statement said the state will also fund what as known as the “cost-to-continue” for Wisconsin’s Medicaid program.
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