The Capitol Report, produced by WisPolitics.com — a nonpartisan, Madison-based news service that specializes in coverage of government and politics — provides a weekly analysis of issues being debated in Wisconsin state government. It is underwritten by the WNA and produced exclusively for its members. WisPolitics.com President Jeff Mayers is a former editor and reporter for the Associated Press and a former political writer for the Wisconsin State Journal.
How would a Gov. Crowley differ from a Gov. Tiffany? One big
difference is how they would use a projected $3 billion surplus if
they took office in January.
With state revenues coming in higher than expected, GOP gubernatorial
nominee Tom Tiffany vowed to return all of a projected surplus to
taxpayers, while Dem rival David Crowley said he’d look at property
tax relief plus investing in schools and healthcare.
Those pledges came after the state Department of Revenue in late
August released preliminary figures showing the state collected $450.8
million more in tax revenue for 2025-26 than expected. Once final
numbers are in, including expenditures for the fiscal year, it could
push the projected surplus at the end of the 2025-27 biennium to $3
billion.
That would provide the next governor with a healthy foundation for the
next budget.
Crowley, the Milwaukee County executive, knocked Tiffany for
supporting Republicans’ One Big Beautiful Bill Act, which he said cut
money from Medicare and Medicaid. He also knocked Tiffany for
supporting the end of enhanced subsidies for those who get their
coverage through the Affordable Care Act exchanges.
“We need to make sure we are providing back to the community in some
form or fashion,” Crowley said during a media gaggle in Wausau in
response to a question from WisPolitics. “We know that there’s an
affordability crisis.”
Tiffany, a GOP congressman from Minocqua, said in a statement the new
numbers are more proof that Wisconsin is overtaxed and isn’t “a green
light for Madison and David Crowley to spend more of your money.”
“As governor, I’ll return the entire surplus to taxpayers and deliver
lasting tax relief for working families so you can keep more of what
you earn year after year,” he said.
The higher-than-expected collections were driven largely by the income
tax, with an additional $231.1 million in revenue than what the
Legislative Fiscal Bureau had projected in January.
Wisconsin also collected $83.9 million more in corporate taxes and
$79.9 million in sales taxes than what the Legislative Fiscal Bureau
had projected in January.
The DOR report didn’t provide any factors that contributed to the
higher tax collections. Nor did an LFB memo sent to lawmakers
summarizing the numbers.
LFB Director Bob Lang told WisPolitics no one economic factor spurred
the higher collections. He noted strong income tax collections can
often spur higher sales tax revenue as people have more money to
spend.
The preliminary collection numbers are even better than what departing
Gov. Tony Evers’ administration teased in May as the governor
unsuccessfully pushed a $1.8 billion surplus deal that he hashed out
with GOP legislative leaders. At the time, the governor’s office
suggested the price tag could be offset somewhat by tax collections
that were on track to come in $300 million to $350 million higher than
what LFB had projected in January.
That $1.8 billion package failed in the Senate, when three Republicans
from the majority and all 15 Dems in the minority voted against it.
Assembly Joint Finance Committee Co-chair Mark Born, R-Beaver Dam,
said he is ready to come back to Madison again for another shot at tax
relief if a deal can be reached that would pass both houses.
“Today’s preliminary revenue numbers are another sign of the strong
financial position Wisconsin has built through years of responsible
budgeting,” Born said. “Collections came in more than $450 million
above estimates, and that strengthens the case for putting taxpayers
first rather than simply growing government.”
In that January projection, LFB expected the state to finish the
2025-27 biennium with a gross balance of nearly $2.5 billion.
Final numbers for 2025-26 will be released in mid-October as part of
the state’s Annual Fiscal Report, which will also take into account
departmental revenues and expenditures during the fiscal year.
DOR noted in its release those factors “will have substantial bearing
on the final budget balance.”
Senate Finance Co-chair Howard Marklein, R-Spring Green, said he
wasn’t surprised by the numbers after watching monthly collection
reports that suggested the surplus would be larger than previously
expected.
“I remain disappointed that we did not pass the bipartisan agreement
to return money to hardworking taxpayers, reduce property taxes and
help our schools,” Marklein said. “Our families and taxpayers could
use the relief now.”
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