Joint Finance Committee Recap | | |
Joint Finance Committee Concluded its Work on the
2025-2026 Budget
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Today, the 16-member Joint Committee on Finance concluded its work on the 2025-2026 Budget. After working with the Governor and Democratic legislative leaders to reach a bi-partisan deal on key issues like a tax cut, the Universities of Wisconsin, childcare, and K-12 education, the Committee finished its work with an agenda that included a 13-3 (Democratic Sen. LaTonya Johnson voting with the 12 Republican Committee members) passage of the omnibus motion for the University of Wisconsin System, Building Commission, Department of Children and Families, Department of Health Services, Department of Transportation, Building Program, Compensation Reserves, Program Supplements, and Child Abuse and Neglect Prevention Board. The budget totals $111.1 billion and includes an additional $1.4 billion in new spending.
At 5:00 AM this morning, Gov. Tony Evers, Republican legislative leaders and Senate Democratic leader Dianne Hesselbein announced a budget compromise that significantly boosts funding for K-12 education, childcare, and the Universities of Wisconsin while enacting $1.5 billion in tax savings.
The Committee then took its final vote on all of the Joint Committee on Finance’s actions to the budget bill, passing 12-4 along party lines. Details on the omnibus motions taken today can be found below.
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On Monday, the Assembly and the Senate noticed that they plan to call themselves into Extraordinary Session beginning on Wednesday, July 2nd. This allows the legislature flexibility to call themselves back into session at any time with a limited agenda when they are ready to act on the budget beginning Wednesday and does not require a 24 hour notice to call the session.
Reports seem to suggest that the Senate will go first to vote on the budget bill on Wednesday, July 2.
| | Highlights of the Omnibus Motions | | |
The proposed budget deal that is included in today’s omnibus motion invests heavily in education, transportation, child care, and tax relief. It allocates substantial funding to the University of Wisconsin System, including $7 million for 24/7 virtual mental health services, $54 million to retain and recruit faculty, over $94 million for wage increases, and more than $840 million for campus capital projects. Additionally, it includes nearly $1.4 billion in K-12 school funding, the largest special education reimbursement increase in state history, and $30 million for school-based mental health services.
The motion also dedicates $150 million to the Agricultural Roads Improvement Program, with $30 million targeted to bridge and culvert repairs, and $50 million to the Local Projects Program to assist with statewide construction. Over $330 million included is aimed at strengthening the Wisconsin child care industry through direct provider payments, increased subsidies, expanded access, and a new “Get Kids Ready” program. The omnibus motion delivers $1.5 billion in tax relief, eliminates some retirement income taxes, and removes sales tax on utility bills. The motion additionally fully funds Medicaid for two years, and includes over $1.1 billion for hospital payment enhancements.
To read a more in-depth breakdown of what was included in the budget deal see below from the Governor’s press release:
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Taxes
- The deal proposes $1.5 billion in tax savings
- 1.6 million Wisconsin income taxpayers will see income tax cuts under the provision, with an average tax cut of $180
- 82 percent of the tax cut will go to Wisconsin taxpayers with adjusted gross income below $200,000.
- Eliminating retirement income taxes for many Wisconsin retirees. Allowing those age 67 or older to exclude up to $24,000 (up to $48,000 for married-joint filers) of retirement income payments will reduce taxes on approximately 280,000 Wisconsin filers by an average of about $1,000 per filer.
- Eliminate the sales tax on household utility bills to help reduce energy costs for families. This will help lower out-of-pocket costs on energy and utility bills for Wisconsinites across the state, saving Wisconsin households nearly $156 million over the biennium.
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Health Care
- The proposal would fund the current Medicaid program at its cost-to-continue, ie no cuts to the Medicaid program. The cost-to-continue provides ongoing funding for the Medicaid program for the next two years based on the increased costs of providing services and changing enrollment projections.
- It would require DHS to establish the hospital assessment at six percent, with 30 percent of the funds generated retained by the state in the Medical Assistance Trust Fund, which helps to fund the state Medicaid program. The remainder of the funds will be used for investments in hospital provider payments, resulting in over $1.1 billion in additional investments in Wisconsin hospitals.
- It would implement a fee schedule for the state’s workers compensation program like what was proposed in 2023 Assembly Bill 1074 which was supported by WMC and opposed by the WI Hospital Association and WI Medical Society. This provision would impose maximum fees that a health care provider may charge when treating an injured employee through the worker’s compensation system.
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K-12/ Universities of Wisconsin
- The proposal would include a nearly $1.4 billion increase in spendable revenue for K-12 schools across the state in the 2025-27 Biennial Budget. The net categorical aid increase is five times larger than the increase provided in the most recent state biennial budget and a nearly 60 percent increase above the amount previously approved for K-12 schools.
- The proposal also includes the largest percent increase in special education reimbursement rate in state history, which will increase to 42 percent in the first year of the biennium and 45 percent in the second year of the biennium. This is the highest reimbursement rate in 30 years and a larger increase for special education than the last three state budgets combined.
- $30 million to continue providing comprehensive school-based mental health services statewide, modeled on the governor’s successful “Get Kids Ahead” initiative.
- The deal includes an increase of over $256 million for the UW System over the next two years, including:
- Over $100 million to support UW System campuses statewide to help stabilize the system after recent campus closures, layoffs, and program cuts and consolidations and ensure UW institutions remain economic and workforce hubs in communities across our state;
- $7 million to provide 24/7 virtual telehealth mental health services to nearly all students across UW System campuses;
- $54 million to help retain and recruit faculty and staff in high-demand fields of study to ensure UW System institutions remain competitive, world-class institutions;
- Over $94 million to increase wages for UW System workers, including faculty and staff; and efforts designed to promote more flexibility and affordability for students at campuses across Wisconsin, ensuring that any general credit hours students earn are able to be transferred and accepted across all UW System campuses by the fall 2026 semester.
- Over $840 million to support capital building projects on UW campuses across the state.
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Transportation
- The deal would invest $150 million in the Agricultural Roads Improvement Program (ARIP) to continue repairing and improving Wisconsin’s rural roads, most especially to help farmers and producers and the state’s agricultural and forestry industries move products to market safely and efficiently. Additionally, $30 million of the $150 million secured for ARIP will be specifically targeted to bridge and culvert repair to help improve and repair deteriorating bridges across the state.
- It would also invest $50 million to continue the successful Local Projects Program from the last budget, which is designed to support local organizations that have construction projects that serve statewide public purpose.
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Child Care
- The deal would invest over $330 million in Wisconsin’s child care industry, including:
- $110 million in direct payments to child care providers to help providers keep their doors open and lights on, cut child care wait lists, and lower out-of-pocket child care costs for working families.
- The new program will make monthly payments and monthly per-child investments in child care providers to ensure continued, direct support for providers as the Child Care Counts program winds down.
- $66 million to fund a new “Get Kids Ready” initiative, the first-ever child care program funded solely by general purpose revenue, or GPR, in Wisconsin state history, which will support child care providers serving four-year-olds to help prepare Wisconsin’s kids for the classroom and get an earlier jump start on learning at a critical time in development.
- It also includes an over $123 million increase to rates under the Wisconsin Shares Child Care Subsidy Program to help lower out-of-pocket child care costs for working families across the state. The investment will raise rates for the Wisconsin Shares program to ensure Wisconsin meets its statutory obligation, designed to ensure families can access 75 percent of child care slots within a given geographical area and lower the cost of child care for parents.
- And $28.6 million for a pilot program to help support expanding capacity across Wisconsin’s child care industry to ensure more families with infants and toddlers can access quality, affordable child care.
| | July 1, 2025 Omnibus Motions | | June 27, 2025 Omnibus Motions | | | | |
Assembly Speaker Robin Vos (R)
“This budget delivers on out two biggest priorities; tax relief for Wisconsin and reforms to make government more accountable. This deal brings those investments and reforms together and creates a Wisconsin that works for everyone. I appreciate the willingness of Gov. Evers to work with us to fund a bi-partisan agreement that funds our mutual priorities and delivers huge wins for citizens of Wisconsin.”
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JFC Co-Chair Rep. Mark Born (R)
“Wisconsin wins in this budget deal. Not only have we worked together to find compromise, but we also remained committed to our core principles and worked to address real issues facing Wisconsinites. We are proud to have worked diligently to craft this budget, listened to the priorities of our constituents, and we look forward to sending the bill to the Governor later this week.”
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Senate Majority Leader Devin LeMahieu (R) and JFC Co-Chair Sen. Howard Marklein (R)
“This compromise will provide meaningful tax relief for retirees and the middle class, stabilize the child care system without making pandemic-era subsidies permanent, and strengthen our schools by reimbursing special education services at a higher rate.”
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Senate Minority Leader Dianne Hesselbein (D)
“I have been at the table fighting hard on behalf of Senate Democrats to help hammer out a bi-partisan budget agreement. Remember where we were a week ago: Republicans proposing $87 million in cuts to the UW, a mere 5% increase in reimbursement for special education, and no direct payments to childcare providers. Elections matter: the fact that Democrats gained four Senate seats and are close to taking the majority means that Senate Democrats were able to make this budget agreement better for the people of Wisconsin.”
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Assembly Minority Leader Greta Neubauer (D)
“There are critical investments in education, childcare, and the priorities of Wisconsinites in this budget, but we also know that due to years of underfunding by the GOP majorities, there is a lot that remains to be done. Our kids, our schools, and our communities deserve leaders that will deliver for them, and that is what we as Democrats will do in the years ahead.”
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A Spokesman for Sen. Steve Nass (R)
“As he predicted the Vos-Evers Budget is loaded with massive spending and creates a structural deficit projected to be at least $2.5 billion. Also the process was horrible and most legislators voting for it won’t really know what is in it.” (via Molly Beck on X)
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Democratic Members of the Joint Committee on Finance
“We appreciate that important investments were made possible through months of advocacy and pressure. These concessions were not offered freely. They were pried from the stubborn hands of Republicans after endless rounds of negotiation, led by the Governor and brought home by Democratic legislatures. Still, as the budget process moves forward, we cannot escape the feeling that Republicans have left many critical needs unmet.”
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If you would like to find time to discuss the above matter in more detail, please do not hesitate to reach out to your Michael Best Strategies contact.
Have a great day,
Wisconsin GR Team
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One South Pickney Street, Suite 700
Madison, WI 53703
Phone: 608-257-3501
Fax: 608-283-2275
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