Wisconsin leaders agree on budget deal cutting taxes and funding universities

In Wisconsin, Democratic Governor Tony Evers and the Republican-controlled Legislature announced a significant two-year budget agreement on July 1, 2025, a day after the June 30 deadline for enacting a new budget. This bipartisan deal includes a $1.3 billion cut in income taxes mainly benefiting the middle class and significantly increases funding for the Universities of Wisconsin by $256 million over two years, marking the largest funding increase for the UW system in two decades. Additionally, the budget addresses urgent child care funding needs by providing $330 million over two years to stabilize the state's child care system, amidst growing shortages. The budget discussions highlighted a previously contentious relationship between Evers and the Republican leaders, whom he called to collaborate more on issues concerning Wisconsin’s families and children. Evers described the agreement as a 'pro-kid budget', emphasizing benefits for families and future generations. This comes against the backdrop of past budget negotiations that were frequently marked by stalemates. The agreement reflects changing political dynamics, particularly after the Democrats gained legislative seats in the November elections, compelling bipartisan cooperation to ensure meaningful outcomes. Further details include a planned 3% raise for state employees, including university staff, this year, and a 2% raise in the following year. The legislators also aim to address transportation needs through new funding while keeping certain educational funding provisions intact. Importantly, this agreement represents a major shift, as it follows a rare instance where the deadline was not met since 2017, signaling the complexities of political negotiation in Wisconsin’s rapidly changing landscape. The budget plan not only ensures immediate tax relief but also commits resources for education and child care, two critical areas in Wisconsin that require urgent financial backing. Governor Evers is expected to act on the spending plan within ten business days once it passes through the Legislature, a strategic move that reflects his cautious approach to maintaining bipartisan support. He has indicated plans to announce whether he will pursue a third term after signing the budget. Finally, the negotiation underscores a growing recognition of the need to work collaboratively across party lines to meet the diverse needs of Wisconsin’s residents, particularly in a competitive political climate ahead of future elections.