Wisconsin SB 1: Relating to: an income tax subtraction for qualified tips and for qualified overtime compensation; state aid for school districts; surplus refund payments; increasing funding for special education and school age parents programs; state aid to technical colleges and the technical college district revenue limit; and making an appropriation. (FE)

Bill Text

2025 - 2026  LEGISLATURE
May 2026 Special Session
LRB-6710/1
EK/KP/KS/FK/AG:all
SENATE BILL 1
May 12, 2026 - Introduced by JOINT COMMITTEE ON FINANCE. Referred to Joint 
Committee on Finance.
AN ACT to amend 71.52 (6), 115.437 (1), 121.07 (7) (b), 121.105 (title) and 
121.105 (1); to create 20.835 (2) (cd), 38.16 (4) (c), 71.05 (6) (b) 60., 71.05 (6) (b) 
61. and 121.105 (5) of the statutes; relating to: an income tax subtraction for 
qualified tips and for qualified overtime compensation; state aid for school 
districts; surplus refund payments; increasing funding for special education 
and  school  age  parents  programs;  state  aid  to  technical  colleges  and  the 
technical college district revenue limit; and making an appropriation.
Analysis by the Legislative Reference Bureau
Funding for special education and school age parents programs
This  bill  provides  an  additional  $85,000,000  in  fiscal  year  2025-26  and 
$230,000,000 in fiscal year 2026-27 for special education and school age parents 
programs.  Under current law, the state reimburses the full cost of special education 
for  children  in  hospitals  and  convalescent  homes  for  orthopedically  disabled 
children.  After those costs are paid, the state reimburses school boards, operators 
of independent charter schools, cooperative educational service agencies (CESAs), 
and county children with disabilities education boards (CCDEBs) for costs incurred 
to provide special education and related services to children with disabilities and 
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2025 - 2026  Legislature
May 2026 Spec. Sess.
SENATE BILL 1
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LRB-6710/1
EK/KP/KS/FK/AG:all
for school age parents programs (eligible costs) from the amount remaining in the 
appropriation at a rate that distributes the full amount appropriated. 
The  amount  appropriated  for  special  education  and  school  age  parents 
programs in the biennial budget was estimated to provide a proration rate of 42 
percent in fiscal year 2025-26 and 45 percent in fiscal year 2026-27.  However, on 
November 17, 2025, the Department of Public Instruction notified school districts 
and other eligible entities that the interim proration rate is 35 percent due to an 
increase  in  projected  eligible  costs  during  the  2025-27  fiscal  biennium.  By 
increasing the amount appropriated for these aid programs, the bill increases the 
proration rate for aid for eligible costs to an estimated 42 percent in fiscal year 
2025-26 and an estimated 50 percent in fiscal year 2026-27.
Currently,  DPI  provides  1)  special  education  aid  to  school  districts, 
independent  charter  schools,  CESAs,  and  CCDEBs;  2)  aid  for  school  districts, 
CESAs, and CCDEBs for providing physical or mental health treatment services to 
private school and tribal school pupils; and 3) aid for school age parents programs to 
school districts only.
Per pupil aid; state aid
Under current law, per pupil aid is a categorical aid paid to school districts.  
Per pupil aid is funded from a sum sufficient appropriation and is not considered 
state aid for purposes of revenue limits.  Under current law, the amount of per pupil 
aid paid to a school district is calculated using a three-year average of the number of 
pupils  enrolled  in  the  school  district  and  a  per  pupil  amount  set  by  law.    For 
purposes of this categorical aid, the number of pupils enrolled in a school district 
does not include pupils enrolled in an independent charter school.  Currently, the 
per pupil amount is $742.  This aid is paid to school districts on the fourth Monday 
in March.
The bill creates a second per pupil aid for school districts that is funded from a 
sum certain appropriation and is considered state aid for purposes of revenue limits 
(per pupil state aid).  Under the bill, beginning in the 2026-27 school year, the per 
pupil  amount  of  per  pupil  state  aid  is  determined  by  dividing  the  amount 
appropriated for per pupil state aid for the current school year by a three-year 
average of the number of pupils enrolled statewide.  The per pupil amount is then 
multiplied by a three-year average of the number of pupils enrolled in a school 
district.  For purposes of per pupil state aid, the number of pupils enrolled in a 
school district includes pupils enrolled in an independent charter school other than 
a legacy independent charter school.  The bill appropriates $302,500,000 for per 
pupil state aid in the 2026-27 school year.  Finally, the bill requires per pupil state 
aid  to  be  paid  on  a  schedule  that  is  similar  to  the  distribution  schedule  for 
equalization aids.
State aid to technical colleges and the technical college district revenue 
limit
The  bill  increases  state  funding  for  technical  colleges  and  reduces  by  an 
equivalent amount the revenue that technical college district boards may generate 
from the property tax levy.

2025 - 2026  Legislature
May 2026 Spec. Sess.
SENATE BILL 1
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