Wisconsin Senate Democrats reject a bipartisan agreement to return part of the state surplus directly to taxpayers through rebates, deliver property tax relief, and boost special education funding, leaving the surplus in state coffers.
The proposal, part of the May 2026 Special Session Senate Bill 1, passes the Assembly with support from some Democrats. It fails in the Senate after Democrats vote unanimously against it on May 13.
Sen. Cory Tomczyk, R-Mosinee, supports the compromise. He backs an initial plan for $1,000 rebates for joint filers and $500 for individuals, but accepts the final figures of $600 and $300. Tomczyk votes yes on the bill and the accompanying tax cuts on the Senate floor.”
“Since the first time the caucus discussed what to do, if anything, with the state’s surplus, my stance has been that it should go BACK to the people that were overcharged – Wisconsin taxpayers. That is still my stance today,” Tomczyk says.
He notes that divided government requires compromise and expresses confidence in his vote to return money to taxpayers rather than leave it in Madison. The bill ultimately fails.
Rep. Brent Jacobson, R-Mosinee, calls the Senate outcome a major disappointment for families facing rising costs and high property taxes. “Last night’s vote in the Senate was a major disappointment for Wisconsin families burdened by rising costs and out-of-control property taxes,” Jacobson says. “The bitter truth is that Democrat legislators are so opposed to giving taxpayers their money back, they were willing to deny our schools funding for special education.
“Under the Assembly-passed deal, full-time Wisconsin residents who filed a 2024 income tax return qualify for rebates of up to $300 for individuals or $600 for married couples filing jointly. The package also includes more than $350 million in property tax relief, elimination of income tax on tips and overtime, and a $315 million increase for special education in public, choice, and charter schools.”
Jacobson thanks Assembly Speaker Vos and 10 Democratic colleagues who crossed the aisle. He criticizes the outcome for keeping taxpayer money in Madison and pledges to continue pushing for relief in future budget talks.
The surplus stems from higher-than-expected state revenues, sparking debate over whether to refund residents, increase spending or pursue other priorities. Republicans argue for direct returns to overtaxed citizens, while the rejection highlights partisan divides in the Legislature despite negotiations with Gov. Tony Evers. Republicans say they plan to address the surplus in the next state budget.
State surplus history
Surpluses were rare and small before 2019–2020.
As of May 2026, the state retained a multibillion-dollar surplus (general fund around $4.6 billion earlier in the cycle), fueling debates over rebates, tax cuts, property tax relief, and education funding, as seen in the recent failed special session bill.
Wisconsin’s recent surpluses stand out compared to its longer history of fiscal tightness. Strong post-pandemic performance and conservative budgeting have created an unprecedented opportunity, but drawing down reserves in the current biennium and potential economic headwinds (e.g., inflation, federal policy changes) suggest that future budgets may require greater caution. The state’s improved rainy-day fund offers protection, but structural balance remains a challenge if revenues normalize.
