GOP legislators approve $220 million increase for special education, $1.3 billion in tax cuts
Joint Finance Co-Chair Rep. Mark Born (R-Beaver Dam) said at a press conference ahead of the meeting that he would tell advocates who wanted the 60% rate that the state budget has to be 'right-sized' and 'affordable.' (Photo by Baylor Spears/Wisconsin Examiner)
After many delays, the Wisconsin Joint Finance Committee met Thursday evening to approve its plan for K-12 education spending that included a 5% increase to special education funding for schools and its $1.3 billion tax plan that targets retirees and middle-income earners.
Lawmakers on the powerful budget-writing committee went back and forth for nearly three hours about the plans with Republicans saying they made significant investments in education and would help Wisconsinites while Democrats argued the state should do more for schools.
The committee approved a total of about $336 million total in new general purpose revenue for Wisconsin's K-12 schools — only about 10% of Gov. Tony Evers' proposed $3.1 billion in new spending.
Special education costs will receive the majority of the allocation with an additional $220 million that will be split between the general special education reimbursement and a subset of high-cost special education services.
The special education reimbursement funding includes $77.2 million in the first year of the budget, which will bring the rate at which the state reimburses school districts to an estimated 35%, and $151 million in the second year bringing the rate to an estimated 37.5%. It's well below the $1.13 billion or 60% reimbursement for special education that Evers had proposed and that advocates had said was essential to place school districts back on a sustainable funding path.
Education advocates spent the last week lobbying for the additional funding — and warning lawmakers about the financial strain on districts and the resources the students could lose. Ahead of the meeting Thursday, Democrats and a coalition of Wisconsin parents of students with disabilities spoke to the urgent need for additional investment in the state's general special education reimbursement rate.
'Everywhere we've gone in the state of Wisconsin, whether it's rural school districts, urban school districts, whether it's school districts that have passed referendums and those that haven't, they all say the same thing — 60% primary special education funding is absolutely necessary for our schools to succeed,' Rep. Tip McGuire (D-Kenosha) said at the press conference. 'You can see that we have had a cycle of referendum throughout Wisconsin, and that cycle has to end.'
The special education reimbursement peaked at 70% in 1973, according to the Wisconsin Policy Forum. After falling to a low of 24.9% in 2015-16, the state's share of special education costs has been incrementally increasing with some fluctuations.
The Republican proposal represents, at maximum, about a 5% increase to the current rate by the second year. According to budget papers prepared by the Legislative Fiscal Bureau, the investment lawmakers made last session was meant to bring the rate to 33.3%, but because it is a sum certain rate — meaning there was only a set amount of money set aside, regardless of expanding costs — the actual rates have been 32.4% in 2023-24 and an estimated 32.1% for 2024-25.
Joint Finance Co-Chair Rep. Mark Born (R-Beaver Dam) said at a press conference ahead of the meeting that he would tell advocates who wanted the 60% rate that the state budget has to be 'right-sized' and 'affordable.'
'The governor's budget has always [had] reckless spending that the state can't afford, and so we're choosing to make key investments and priorities, and these investments today will be some of … the largest investments you'll see in the budget,' Born said.
The committee also added $54.5 million to bring the additional reimbursement rate for a small number of high-cost special education services to 50% in the first year of the budget and 90% in the second year. The high-cost special education program provides additional aid when costs exceed $30,000 for a single student in one year. According to DPI, in 2025 only 3% of students with disabilities fell in the high-cost special education category.
In 2024-25, the program only received $14.5 million from the state. Evers had proposed the state invest an additional $18.5 million.
Republicans on the committee insisted that they were trying to compromise and making a significant investment in schools — noting that education likely will continue being the state's top expenditure in the budget. Meanwhile, Democrats spoke extensively about the need for higher rates of investment, read messages from superintendents and students in their districts and said Republicans were not doing what people asked for.
'High needs special education funding only reaches about 3% of Wisconsin's special education students,' Rep. Deb Andraca said. 'You're getting a couple good talking points, but you're not going to get the kinds of public schools that Wisconsin kids deserve.'
During the committee meeting, Sen. Julian Bradley (R-New Berlin) criticized Democrats for saying they would vote against the proposals. He said Democrats would vote against any proposal if it isn't what they want.
'If we all voted no, we would return to base funding, which was good enough by the way for the governor last budget because he signed it,' Bradley said. 'There would be no increases, but instead we've introduced a motion which will increase funding.'
McGuire responded by saying he wouldn't vote for a proposal that is 'condemning the state to continuing the cycle of referendum,' which he said Republicans are doing by minimally increasing the special education reimbursement rate and not investing any additional money in general aid.
'Wisconsinites across the state are having to choose between raising their own property taxes' and the schools, McGuire said.
The Kenosha School District, which is in McGuire's legislative district, recently failed to pass referendum to help reduce a budget deficit. School leaders had said a significant increase in the special education reimbursement would prevent the district from having to seek a referendum again.
'They had a $19 million budget gap, and if this state went to 60% special education funding, you know roughly where we promised we would be, that would've gone down to $6 million,' McGuire said, '…$13 million of those dollars are our responsibility. That's been our failing, and we should live up to that.'
'What are we arguing about? We're putting more money in,' Sen. Patrick Testin (R-Stevens Point) said.'I would think that when this gets to his desk, Evers would sign this because it is a bigger increase than any of what he proposed while he was state superintendent.'
McGuire said the investment in the high-cost special education is also good, but only applies to a small number of schools and students.
'You know, what would benefit all school districts in the state and will benefit all students who need special education? The primary special education reimbursement rate, which you put at 37.5[%], but everyone says should be at 60[%].' McGuire said. 'I don't think this is your intention, but I don't believe that we should be exchanging children who need our assistance for other children who need our assistance. Why can't we just help all of the kids who need our help?'
Rep. Tony Kurtz (R-Wonewoc) said that the increase for high-cost special education will have a significant impact on some schools, especially smaller ones, and students, even if it's not many of them.
'To get 90% for them is huge for any of our rural districts. One child, which deserves an education, can break the bank for our small districts,' Kurtz said. 'Is it perfect? No, it's not perfect, but we have to stay within our means.'
Committee co-chair Sen. Howard Marklein (R-Spring Green) echoed Kurtz's comments saying that there will be 'a lot of districts that are going to be awful happy about that.'
'They've been worried about sometimes, a student moves into the district, and it's of incredibly high, high needs,' Marklein said.
The committee also declined to include additional general aid for school districts. Republicans on the committee said there was already a $325 per pupil increase to districts' revenue limits built into the budget from last session due to Evers' partial veto. The increase gives districts the option to raise property taxes, though it doesn't require them to, and does not include state funding for the increase.
Sen. Romaine Quinn (R-Birchwood) told lawmakers not to forget about the increase, saying the 'insulting part about that is that everyone gets it.
There are schools that don't need that,' Quinn said. '72% of my districts spend less than [the schools of] my Democratic colleagues on this panel.'
School Administrators Alliance Executive Director Dee Pettack, Wisconsin Association of School Boards Executive Director Dan Rossmiller, Southeast Wisconsin School Alliance Executive Director Cathy Olig and Wisconsin Rural Schools Alliance Executive Director Jeff Eide said in a joint letter reacting to the proposal that lawmakers failed to hear the voices school leaders, parents and community and business leaders.
'While the $325 revenue limit authority exists, it is not funded by the state. Instead, it is entirely borne by local property taxpayers. In addition, school districts will not see the requested support in special education,' the leaders stated. 'Because of the lack of state support in these two critical areas, school districts will be left with no choice but to ask their local taxpayers to step up and shoulder the costs locally, regardless of their ability to pay.'
The leaders said the state was investing minimally and school districts will continue to struggle to fund mandated primary special education programs.
State Superintendent Jill Underly called the Republicans' proposal 'irresponsible' in a statement Friday and said it 'puts politics ahead of kids and disregards educators and public schools when they need support the most.'
'Our public schools desperately need and deserve funding that is flexible, spendable and predictable,' Underly said. 'This budget fails to deliver on all three. Once again, those in power had an opportunity to do right by Wisconsin's children — and once again, they turned their backs on them.'
The committee also approved $30 million for the state's choice school programs, $20 million for mental health services in school, $250,000 for robotics league grants, $750,000 for a single school, the Lakeland STAR Academy (a provision that Evers vetoed last session), $100,000 for Special Olympics Wisconsin, $3 million for public library system aid, $500,000 for recovery high schools and $500,000 for Wisconsin Reading Corps.
Republican lawmakers also approved tax cuts of about $1.3 billion for the budget Thursday evening after 8 p.m., including changes to the income tax brackets and a cut for retirees in Wisconsin.
Born and Marklein said the cuts would help retirees and other Wisconsinites afford to stay in the state.
'These are average, hard-working people in our state that will benefit from our tax cut,' Marklein said.
The income tax change will allow more people to qualify for the second tax bracket with a rate of 4.4% by raising the qualifying maximum income to $50,480 for single filers, $67,300 for joint filers and $33,650 for married-separate filers. This will reduce the state's revenues by $323 million in 2025-26 and $320 million in 2026-27.
People currently eligible for the second tax bracket include: single filers making between $14,680 and $29,370, joint filers making between $19,580 and $39,150 and married separate filers making between $9,790 and $19,580.
Wisconsin Republicans have been seeking another significant tax cut since the last budget cycle when Evers vetoed their proposals. After the rejection, Republicans started to narrow their tax cuts proposals to focus on retirees and a couple of other groups with the hope of getting Evers' approval. When negotiations on this year's budget reached an impasse, Evers had said he was willing to support Republicans' tax goals, but he wanted agreements from them, too.
The proposal also includes an exclusion from income taxes for retirees that would reduce the state's revenues by $395 million in 2025-26 and $300 million in 2026-27.
'This isn't a high-income oriented kind of thing,' Marklein said during the meeting. 'It just helps a lot of average people in the state of Wisconsin, so it's very good tax policy.'
Democrats appeared unimpressed with the tax proposal.
The Legislative Fiscal Bureau told lawmakers that the income tax change would lead to about a maximum impact of $253 annually for married joint filers, $190 annually for single filers and $127 for married separate filers.
'So roughly $5 a week for a married couple,' McGuire said.
McGuire said that Democrats just have the perspective that Wisconsin could invest more in the priorities that residents have been expressing.
'We heard from a lot of people about what they need,' McGuire said in reference to school districts. 'We also know that as they've been attempting to get those funds they've had to go to referendums across the state, and… we think that's harming communities and making it more difficult for people. As a perspective, we believe that that's a good place to invest in dollars.'
The committee also voted to provide additional funding for the Wisconsin technical colleges, though it is, again, significantly less than what was requested by Evers and by the system.
The proposal will provide an additional $13 million to the system. This includes $7 million in general aid for the system of 16 technical colleges, $2 million in aid meant for grants for artificial intelligence, $3 million for grants for textbooks and nearly $30,000 to support the operations of the system.
Evers had proposed the state provide the system with $45 million in general aid
Sen. LaTonya Johnson (D-Milwaukee) said the differences between Evers' proposals and what Republicans offered were stark.
'We hear my GOP colleagues talk about worker training all the time and this is their opportunity to make sure that our technical colleges have the resources that they need to make sure that we are training an adequate workforce,' Johnson said, noting that the state could be short by 1,000 nurses (many of whom start their education in technical colleges) by 2030. 'I've never had an employer complain about having an educated workforce, not once, but I have heard employers say that Wisconsin lacks the skill sets and educational skills they need. It seems my Republican colleagues are more concerned with starving our institutions of higher education, rather than making sure they have the resources they need.'
Testin said the proposal was not a cut and that Republicans were investing in technical colleges.
'We see there's value in our technical colleges because they are working with the business community … getting students through the door quicker with less debt,' Testin said. 'Any conversations that this is a cut is just unrealistic. These are critical investments in the technical system.'
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