July 2025 Legislative Update

2025-27 State Budget Signed: Stewardship not included

Early in the morning on July 3, the Wisconsin legislature passed a $111.1 billion budget bill for the 2025-27 biennium and Gov. Evers quickly signed it. Overall, the plan is a 12 percent increase in spending.

The vote came just days after the state’s fiscal year closed on June 30. With new legislative maps resulting in narrower margins—particularly in the Senate, where Republicans hold an 18-15 majority—the budget faced added pressure to gain enough support to move forward and be signed by Democratic Governor Evers.

The budget talks between the Governor and Republican legislative leaders were on and off for the last 6 weeks, with a final movement to bipartisan deal announced on July 1, 2025, after the Senate Democratic leader was pulled into the discussions.

The top lines of the deal include a combination of the priorities of both the legislative Republican and Governor Evers’ “Year of the Kid” policy priorities including:

  • Tax Cut: $1.5 billion in income tax cuts targeting the middle class by expanding the second lowest income tax bracket, making the first $24,000 of retirement income for those 67 and older tax-free, and eliminating the 5% sales tax on electricity.
  • Child Care: over $330 million in investments for the child care industry, including the first-ever state funded child care program funded by state general purpose revenue
  • K-12: nearly $1.4 billion increase in spendable revenue for K-12 schools across the state; including increasing the special education reimbursement rate to 42 percent in the first year and 45 percent in the second year.
  • UW System: Increase of over $256 million for the Universities of Wisconsin.

 In addition, the agreement includes an additional $200 million for transportation funding through a variety of fee increases. Also, a key piece of the package is $1.4 billion to cover Medicaid costs and an increase of the hospital assessment from 1.8 percent to 6 percent, generating more than $1 billion in additional dollars for hospitals, annually. The state would retain 30% of the matching federal funds, which would go into Wisconsin’s Medicaid trust fund.

Absent from the 2025-27 state budget was the reauthorization of the Knowles-Nelson Stewardship Program (KNSP) – WPRA’s top priority. The program has been facing an uncertain future following last summer’s Wisconsin Supreme Court ruling that deemed the JFC’s practice of anonymously blocking projects unconstitutional. This decision has led to concerns among some Republican legislators about the program's oversight.

While not included in the budget, Rep. Tony Kurtz (R–Wonewoc) and Sen. Patrick Testin (R–Stevens Point) have introduced a bill to reauthorize KNSP for four more years until June 2030. The proposal reduces annual funding to $28.25 million, about $5 million less than current levels—and imposes a $1 million cap on grants per project, requiring separate legislative approval for larger land acquisitions. However, the proposal maintains funding for the Local Government (LUG) and the Boating Aids subprograms. WPRA is submitted testimony in support of the bill.

During the final days of the budget process, Rep. Kurtz and Sen. Testin put out a statement acknowledging that KNSP will not be in the budget but that they “are committed to getting something done and not taking action today gives us the best opportunity to ensure the bill for the program has the time and attention it needs for future success.”

Several Senate Republicans have concerns with the program and it is unclear if there are votes to advance the Kurtz/Testin legislation. WPRA will continue to advocate for the continuation of the KNSP. The KNSP is reauthorized through June 30, 2026.