Why It Matters
Wisconsin lawmakers are exploring how to deploy a projected state budget surplus to deliver property tax relief and increase public school funding — two priorities that directly affect homeowners and families across the state. The proposal, centered in Racine but drawing support from lawmakers statewide, could reshape how Wisconsin finances its public education system and reduces the financial pressure on local taxpayers.
For communities like Racine and Kenosha, where property tax bills have already climbed sharply in recent years, the stakes are significant. School districts in both cities have struggled to cover rising operational costs, particularly for special education services, which are increasingly underfunded at the state level.
What Happened
Democratic State Representatives Angelina Cruz of Racine and Christian Phelps of Eau Claire have introduced a proposal to redirect a portion of Wisconsin’s projected $2.5 billion budget surplus toward public education funding. The bill aims to increase general school aid and raise the state’s reimbursement rate for special education costs.
Cruz hosted a media roundtable in Racine on Wednesday, March 25, alongside State Rep. Greta Neubauer, also of Racine. The event brought together superintendents, school board presidents, and parents from the Racine and Kenosha Unified School Districts to discuss the proposal and its potential impact on local communities.
The central argument behind the plan is that by increasing the state’s share of education funding, local school districts would become less dependent on property tax revenue — a shift that supporters say could stabilize district finances while providing direct relief to homeowners.
By the Numbers
The figures behind the proposal illustrate both its scale and the urgency lawmakers say prompted it:
- $2.5 billion: Wisconsin’s projected surplus in the 2025–27 biennial budget, according to lawmakers involved in the proposal.
- $1.3 billion: The portion of the surplus Cruz and Phelps propose allocating toward public education under their bill.
- $445,949,400: The proposed increase in general school aid for the 2026–27 school year alone.
- 60%: The proposed new state reimbursement rate for special education costs, up from the current level, which advocates say leaves districts covering a significant share of expenses through local funds.
- 29%: The increase in property tax bills already seen by some taxpayers in the Kenosha Unified School District, according to Superintendent Jeff Weiss.
Zoom Out
Wisconsin’s debate over how to use its budget surplus mirrors conversations happening in state capitals across the country. Several states have wrestled with similar questions about whether to return surplus funds to taxpayers through direct cuts, invest in long-underfunded public services, or pursue a combination of both.
Special education funding has become a flashpoint in many states, as federal obligations under the Individuals with Disabilities Education Act require districts to provide services regardless of whether state reimbursements keep pace with actual costs. When states fall short on reimbursement, the gap is typically filled by local property taxes — a dynamic critics say places an unfair burden on homeowners and creates inequities between wealthier and lower-income districts.
Wisconsin has historically reimbursed a relatively low percentage of special education costs compared to other states, making the 60% reimbursement target in the Cruz-Phelps proposal a notable increase. Advocates for public education have long called for the state to assume a greater share of these costs to reduce pressure on local budgets.
What’s Next
Despite the proposal’s momentum in Racine, its path through the Wisconsin Legislature faces an immediate obstacle. Both the Assembly and the Senate have concluded their last regular floor sessions for the 2025–26 term, meaning the bill is unlikely to receive a vote before the current legislative session ends.
Cruz and Phelps are expected to use the remaining months of the session to build public support and gather input from school districts, parent groups, and taxpayer advocates. The proposal could be reintroduced in the next legislative session, where it may gain traction if the surplus projections hold and education funding remains a top concern for constituents.
Wisconsin’s full biennial budget for 2025–27 is still being finalized, and negotiations over how to allocate the projected surplus will continue between the Democratic-backed proposals and the Republican-controlled legislature in the months ahead.