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Yahoo
07-07-2025
- Business
- Yahoo
Republican tax cut calls for shielding retirement income from Wisconsin income taxes
MADISON — Included in a Republican tax cut plan advancing in the Legislature is a provision to shield some retirement income from Wisconsin income taxes. The Republican plan would exclude from taxation the first $24,000 of retirement income received by individuals age 67 and over. Non-residents would not be able to claim the exemption, and part-time residents could only claim the portion of their income sourced to Wisconsin. "We've done all these things to make (Wisconsin) a great place to live and work and raise a family. I want it to be also a great place for those people that have worked so hard to make all that happen, to stay and watch their grandkids grow," said Joint Finance co-chair Rep. Mark Born, R-Beaver Dam. The GOP plan also includes a measure proposed in Evers' budget, increasing the maximum deduction for adoption expenses from $5,000 to $15,000. More: Republicans back boost in special education funding but pare back Gov. Tony Evers' proposal Those provisions are part of a $1.3 billion tax cut proposal that includes expanding the state's second-lowest tax bracket to bring in more residents, a change that is estimated to lower taxes for 1.6 million filers. The Legislature's budget-writing Joint Finance Committee approved the tax measures on June 12 on a party-line vote. The package will be part of a state budget plan that will go to the full Assembly and Senate for approval and sent to Gov. Tony Evers for his signature. Evers' office did not comment on the June 12 actions. This article originally appeared on Milwaukee Journal Sentinel: Wisconsin Republicans call for shielding retirement income from taxes
Yahoo
13-06-2025
- Business
- Yahoo
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.' SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Yahoo
09-05-2025
- Business
- Yahoo
Budget-busting voucher expansion could bankrupt Wisconsin public schools
As the Legislature begins working on the Wisconsin State Budget, a dangerous idea to give school vouchers their own separate line item could become a huge drain on resources. | Getty Images Creative The top issue Wisconsinites brought to legislators' attention at budget hearings around the state last month was the need to adequately fund public schools. But now, as the Legislature's powerful budget committee is beginning to work on the budget in earnest, a low-profile plan that never came up in those public hearings aims to turn school vouchers into a statewide entitlement, sucking up all the resources that might otherwise go to public schools and putting Wisconsin on a path to a full–blown budget crisis. The plan, contained in two bills that failed in the last legislative session, would stop funding school vouchers through the same mix of state and local funding that supports regular public schools, and instead pay for school vouchers just out of the state's general fund. 'It's certainly something that I personally support. … I'm sure it will be part of the discussion,' Rep. Mark Born (R-Beaver Dam), co-chair of the powerful Joint Finance Committee, told Lisa Pugh on Wisconsin Eye when she asked about 'decoupling' Wisconsin voucher school funding from the rest of the school finance system. 'Decoupling' would pave the way for a big expansion in taxpayer subsidies for private school tuition. While jettisoning the caps on available funds and enrollment in the current school formula, voucher payments would become an entitlement. The state would be obligated to pay for every eligible student to attend private school. It's worth noting that most participants in Wisconsin's voucher programs never attended public school, so what we are talking about is setting up a massive private school system with separate funding alongside the public K-12 school system. That's more than Wisconsin can afford. Anne Chapman, research director for the Wisconsin Association of School Business Officials (WASBO), has followed the issue closely. 'It could come up last-minute, on very short notice,' she warns. She worries that Wisconsin is following the same path as other states that have steadily expanded public funding for private schools without accurately assessing what the expansion would cost. In a recent WASBO paper, 'The price of parallel systems,' Chapman writes that Wisconsin already ranks third among states with the highest proportion of state education dollars used in private schooling options (9%). The top two states, Florida (22%) and Arizona (12%), she writes, are 'cautionary examples.' Florida's universal voucher program will cost the state $3.9 billion this year. The state, which until now has been running budget surpluses, is projecting a $6.9 billion deficit by 2027-28, fueled by the voucher expansion along with tax cuts. Arizona is also facing much bigger than expected costs for its universal voucher program. After projecting it would cost $64 million in 2023-24, the state found that it underestimated the cost of vouchers by more than 650%. The real cost of universal vouchers in Arizona in 2023-24 was $738 million. The result: a huge budget deficit and significant cuts to public schools. Wisconsin, which launched the first school voucher program in the nation in Milwaukee 35 ago, has steadily increased both the size and per-pupil expenditures of its system of voucher schools. That's despite a research consensus that school vouchers have not improved academic outcomes for students and, in fact, have done significant harm. Testifying recently against a school voucher bill in Texas, University of Michigan professor and school voucher expert Josh Cowen described the 'catastrophic' results of vouchers on educational outcomes across the country over the last decade. Cowen has been evaluating school vouchers since the 1990s, when the first pilot program in Milwaukee had a measurable, positive impact on the 400 low-income kids who used vouchers to attend traditional private schools. As school vouchers expanded to serve tens of thousands of students and 'subprime' operators moved in to take advantage of taxpayer dollars, however, the results took a dramatic downturn. Cowen described the 'horrific learning loss' he and other researchers have recorded over the last decade among kids who started in public school and then moved to private school using vouchers. He was used to seeing trends in education that simply didn't work to improve outcomes, he told the Texas legislators, but 'it's very rare to see something that harmed kids academically.' The worst drops in test scores, he said, came in 2014-15 — the same year that states began taking the programs statewide. He concluded that the smaller programs that had paid close attention to students and offered them a lot of support became something entirely different when vouchers were scaled up. Yet despite the abysmal results, more and more states are moving toward universal voucher systems. Imagine, Cowen told the Texas legislators, if '30 years ago a vaccine showed some positive effects in clinical trials for a few hundred kids.' Then, when the vaccine was approved and used on thousands of children, 'the health effects became negative, even atrocious.' 'No one would say, 'let's just hang our hat on the pilot and focus on results from 30 years ago,' Cowen said. But that's exactly what's happening with school vouchers. The kids vouchers were originally supposed to help — low-income children in underresourced schools — have suffered the most. Studies from research teams in Louisiana, Indiana, Ohio and Washington, D.C., show learning losses for kids who left public school to attend voucher programs that surpassed the learning loss experienced by students in New Orleans after Hurricane Katrina or by children across the country from the COVID-19 pandemic, Cowen said. Instead of helping those struggling students, who often attend the 'subprime' schools Cowen discussed, the voucher programs in Wisconsin and other states mostly provide a taxpayer-financed benefit to private school families — 70% of whom have never put their kids in public school. Anti-government ideologues and school choice lobbyists are selling a faulty product with the rapid expansion of school vouchers. Part of the scam is the effort to hide the true costs from taxpayers. That's the part Chapman, the school business expert, is worried about. As school districts struggle with lean budgets, under the current system, at least local taxpayers can see how much they are paying to support the voucher schools in their districts. If the Legislature succeeds in moving the cost of school vouchers into the general statewide budget, that transparency will be lost. And, at the same time, the state will open the door to unlimited spending on vouchers, no matter how expensive the program becomes. School choice advocates in Wisconsin have long pushed for 'a voucher in every backpack' — or universal eligibility for the private school voucher program. 'Eligibility' doesn't mean the same thing as 'access,' however: In Wisconsin voucher schools have a track record of kicking out students who are disabled, challenging to educate, LGBTQ or for any other reason they deem them a bad fit. Those students go back to the public schools, whose mission is to serve all students. In contrast, private schools in the voucher system can and do discriminate. Yet, Chapman reports, we are now spending about $629 million for Wisconsin's four voucher programs, which serve 58,623 students. That's $54 million more than the $574.8 million we are spending on all 126,830 students with disabilities in Wisconsin, as school districts struggle with the cost of special education. As if that weren't enough, at the federal level, the Educational Choice for Children Act of 2025 (ECCA), currently being considered by Congress, would give a 100% tax deduction on donations to nonprofits known as Scholarship Granting Organizations, which give out private K-12 school vouchers. Normally, donors to nonprofits can expect a tax deduction of 37 cents on the dollar at most. The 100% tax deduction means financial advisers across the country will push clients, whether they are school choice advocates or not, to give money to voucher schools. Under the bill, contributors would also be allowed to give corporate stock and avoid capital gains tax. 'This would allow wealthy 'donors' to turn a profit, at taxpayer expense, by acting as middlemen in steering federal funding into private K-12 schools,' the Institute on Taxation and Economic Policy reports. ITEP estimates that the ECCA would cost the federal government $134 billion in foregone revenue over the next 10 years and would cost states an additional $2.3 billion. The very least we can do as citizens is to demand accountability and transparency in the state budget process, before we blow all of our money on tax breaks and tuition vouchers for people who don't need them. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
