New budget initiatives announced will hold the line on property taxes while providing meaningful tax relief to working Wisconsinites, families, seniors, and veterans, lower the cost of utility bills, child care, groceries, medication, doctor visits, and more.

MADISON — Gov. Evers on Feb 18th night, during his 2025-27 Biennial Budget Message, announced his 2025-27 Executive Budget will include additional efforts to lower everyday, out-of-pocket costs for working Wisconsinites and families—from child care and groceries to utility bills, life-saving medications, doctor visits, and everything in between. Among his proposals includes nearly $2 billion in tax relief across efforts to hold the line on property taxes, exempt many everyday household items and expenses from the sales tax, and cut income taxes for middle-class Wisconsinites.

This comes as, last month, during his 2025-27 State of the State address, Gov. Evers also announced efforts to cut everyday out-of-pocket costs for working families by reducing the cost of child care and lowering the cost of life-saving medication, including removing the sales tax on over-the-counter medications, capping the cost of insulin copays, and protecting Wisconsinites from price gouging on prescriptions.

Gov. Evers announced his 2025-27 Executive Budget will include efforts to hold the line on property taxes, cut taxes for working Wisconsinites, and reduce everyday, out-of-pocket costs for working families by:

• Providing over $1.3 billion in property tax relief to Wisconsinites over the biennium by:
• Holding the line on property taxes and preventing increases in tax bills on the typical Wisconsin homeowner in both years of the biennium by making meaningful investments in Wisconsin’s K-12 schools and directing property tax credits to taxpayers through the school levy tax credit;
• Providing more than $1 billion in aid to local governments that agree to freeze property taxes; and
• Increasing property tax relief programs under the individual income tax by $237 million over the biennium for veterans, seniors, individuals with disabilities, and others struggling to afford the property taxes on their homes.
• Eliminating the tax on cash tips, ensuring individuals keep more of their hard-earned money in their pockets to the total of $13.6 million over the biennium; 
• Eliminating the sales tax on everyday household items and costs, including over-the-counter medications and utility bills, saving Wisconsinites $261.3 million over the biennium;  
• Providing more than $116 million in meaningful tax relief for working families by enhancing the Earned Income Tax Credit (EITC); and 
• Nearly doubling the personal tax exemption under the Wisconsin individual income tax, helping Wisconsinites keep $225.9 million more of their money over the biennium.

Relevant excerpts from Gov. Evers’ 2025-27 Biennial Budget Message are available below:

“... Our budget includes my comprehensive plan to lower costs from child care to medication to help working families, seniors, and students. I’m providing nearly $2 billion in tax relief, including eliminating income tax on tips. And my plan invests in public education at every level while holding the line on property taxes to make sure the average homeowner will not see a property tax increase.

...

“My budget would create a new incentive for local governments to freeze their local property taxes. If local governments agree not to raise local property taxes, they’ll get a direct payment from the state. This will ensure local partners can still afford to pay for basic and unique local needs alike without property taxes going up. 

“Working to prevent property tax increases is a key part of my plan to lower costs for working families. But we can do more to reduce everyday, out-of-pocket costs for folks across our state. 

“More Wisconsinites are working than ever before, but paychecks today aren’t going nearly as far as they used to. I’m really concerned President Trump’s 25 percent tariff tax will not only hurt our farmers, ag industries, and our economy but that it will cause prices to go up on everything from gas to groceries. Some estimates indicate this could raise costs on the average American by as much as $1,200 a year. That will make it even harder for Wisconsinites to make ends meet.

“So, I’m asking Republicans and Democrats to work together to pass my comprehensive plan to lower everyday, out-of-pocket costs for working families.

“Wisconsinites need a leg up to be able to finally get ahead—on utility bills, on child care costs, on groceries, medication, and doctor visits, and everything in between. And I’ve got a plan to do just that. Here’s how we get it done.

“Let’s save Wisconsinites money on their monthly utility bills. I’m proposing to eliminate the sales tax on electricity and gas for Wisconsin homes, which will save Wisconsinites about $100 million in out-of-pocket costs each year.

“Wisconsinites also need the Legislature to get serious about lowering out-of-pocket costs for child care this session. No more excuses, folks. Putting two young kids in child care in Wisconsin costs more than the average rent or mortgage. In 2023, child care costs consumed as much as a third of a family’s household income. Our workforce and economy can’t afford more parents leaving their jobs because they can’t afford child care. Let’s invest in our child care providers so they can hire more staff, reduce wait lists, and lower the cost of child care so we can get working parents and families a little more breathing room in their household budgets. That’s a win-win-win-win for our kids, our families, our workforce, and our state.

“My plan will provide nearly $2 billion in tax relief through efforts to lower property taxes, eliminate the sales tax on several everyday expenses, and cut income taxes for middle-class Wisconsinites, including homeowners, renters, veterans, and seniors.

“Let’s also make sure Wisconsinites can keep more money in their pockets. I’m proposing to nearly double Wisconsin’s personal income tax exemption. That means Wisconsinites will pay no income taxes on the first $1,200 they earn, period. And I want us to work together to pass my proposal to support students and workers in our service industries by letting them keep the tips they earn tax-free. Let’s eliminate taxes on cash tips.

“My plan will also give Wisconsinites more tax relief back based on the mortgage and rent they pay. By building upon our Homestead Tax Credit, my new Property Tax and Rent Rebate will provide nearly $150 million in tax relief for about 165,000 homeowners and renters across our state.

“A key part of my plan to lower costs for working families includes making it easier for folks to get the healthcare they need without breaking the bank. Healthcare should not be a privilege afforded only to the healthy and the wealthy. It’s why I’m again proposing to expand BadgerCare, which would save Wisconsin taxpayers nearly $2 billion over the next two years and expand quality, affordable healthcare coverage for about 100,000 Wisconsinites. And I’m also providing new hospital investments to improve access to healthcare across Wisconsin, including in our rural communities.

“As part of my comprehensive plan to lower costs for working families, I’m also proposing sweeping plans to lower costs for prescriptions and medication and crack down on price gouging and health insurers. My “Less for Rx” plan will lower costs for life-saving prescription drugs and insulin. We’d create a Prescription Drug Affordability Review Board to crack down on prescription price gouging. We’d cap the cost of insulin copays at $35. We’d set price ceilings for prescription medication. And we’d save Wisconsinites a projected $70 million over the next two years alone by eliminating the sales tax on over-the-counter medications. Let’s finally make lowering everyday, out-of-pocket costs for medication a bipartisan priority this session. ...”

PROVIDING PROPERTY TAX RELIEF AND PREVENTING TAX INCREASES FOR THE AVERAGE WISCONSIN HOMEOWNER
According to a December 2024 report from the Wisconsin Policy Forum property taxes in Wisconsin are expected to see the largest increase since 2009, and in any given year, K-12 schools make up nearly half of all local property tax levies in Wisconsin.

Therefore, the governor’s 2025-27 Executive Budget will deliver relief to property taxpayers by ensuring that school districts receive meaningful revenue-raising authority while also holding net school property tax impact flat by ensuring the state makes meaningful, substantial investments in K-12 schools statewide. The governor is proposing a $3.1 billion investment in kids and schools, nearly all of which is spendable revenue for schools, as well as $375 million in school levy tax credits to provide direct property tax relief back to property taxpayers. This will bring the state’s total support for school revenues to over 70 percent in both years of the biennium—once again, reaching and surpassing the state’s goal to provide two-thirds funding to public schools statewide.

Additionally, to hold the line on local property taxes and prevent further increases in tax bills on the typical Wisconsin homeowner, Gov. Evers is proposing a more than $1 billion investment in aid to local governments and direct property tax credits to taxpayers over the biennium. The governor’s proposal would create a new county and municipal property tax freeze incentive program by providing aid payments to counties and municipalities that commit to holding the line on property taxes. Communities that do not increase their levy will receive aid payments based on the revenue a three percent levy would have generated, helping them to maintain essential services without raising taxes. The first eligible levies for this incentive will be for the 2026 tax year, delivering meaningful tax relief to Wisconsinites.

Under current law, without additional funding to offset rising costs, property taxes on the typical homeowner are expected to rise by $324 from the 2024-25 property tax year, which just concluded, to the 2026-27 property tax year. Gov. Evers’ budget averts that entire increase and freezes the typical bill at the current level, as shown in the graph here.

Gov. Evers’ budget will further increase property tax relief programs under the individual income tax by $237 million over the biennium for veterans, seniors, individuals with disabilities, and others struggling to afford the property taxes on their homes by:

• Renaming the Homestead Tax Credit to the “Property Tax and Rent Rebate” to better reflect its benefits to property owners and renters, in addition to increasing the maximum income threshold for the credit to $37,500 and indexing the parameters of the credit for inflation beginning in tax year 2026 to preserve the credit’s value against inflation. This will provide $147.8 million in property tax relief for approximately 165,000 homeowners and renters, especially seniors and others on fixed incomes over the biennium.
• Expanding the veterans and surviving spouses property tax credit to include renters with a credit rate of 20 percent of rent when heat is included and 25 percent when heat is not included. This will provide $23 million in tax relief to veterans and their families over the biennium.
• Expanding eligibility for the veterans and surviving spouses property tax credit to allow those with disability ratings of 70 percent or greater to claim the credit beginning with tax year 2025. For those with disability ratings between 70 percent and the current law disability rating requirement of 100 percent, the credit amount available would be multiplied by the claimant’s disability rating. This provision will provide additional relief of $66.5 million for disabled veterans and their families over the biennium.

CUTTING TAXES FOR WORKING WISCONSINITES AND MIDDLE-CLASS FAMILIES
Thanks to Gov. Evers’ efforts over the past six years to cut taxes, Wisconsinites are keeping more of their hard-earned income today than at any point in the last 50 years.A Wisconsin Policy Forum report shows that Wisconsin’s state and local tax burden dropped to a record low in 2024. The state and local taxes Wisconsinites pay as a share of their income is the lowest it has been in over half a century. All told, through the income tax cuts the governor has signed into law, most Wisconsinites have seen a 15 percent income tax cut or more and will see $1.5 billion in tax relief each year, primarily targeted to the middle class.

Building on his work to cut taxes, Gov. Evers’ 2025-27 Executive Budget will:

• Increase the personal exemption under the Wisconsin individual income tax from $700 to $1,200 beginning with tax year 2025, cutting personal income taxes by $225.9 million over the biennium.
• Remove the income tax on cash tips, a proposal that has received bipartisan support on both the state and national level. This will allow working Wisconsinites to keep more of their hard-earned money to the total of more than $13.6 million over the biennium.
• Provide more than $116 million in meaningful tax relief for working families by increasing the percentage of the federal the EITC Wisconsin provides from four percent to 16 percent for filers with one qualifying child and 11 percent to 25 percent for filers with two qualifying children beginning in tax year 2025.  

ELIMINATING THE SALES TAX ON EVERYDAY OUT-OF-POCKET COSTS
In addition to eliminating the sales tax on over-the-counter medications, as previously announced, the governor’s budget will also eliminate the sales tax on other everyday, household items and costs for working families, saving Wisconsinites $261.3 million on sales tax over the biennium. This includes:

• Eliminating the sales tax on electricity and natural gas sold for residential use to help reduce energy costs for families. This will reduce sales taxes on Wisconsinites by nearly $156 million over the biennium; and
• Eliminating the sales tax on basic family needs, including over-the-counter medications, diapers, menstrual products, and everyday household items like deodorant, toothpaste, and sunscreen, saving Wisconsinites $105.3 million over the biennium.

LOWERING THE COST OF CHILD CARE FOR WORKING FAMILIES
Gov. Evers announced in his 2025 State of the State Address that his 2025-27 Executive Budget will build upon his administration’s efforts to invest in lowering the cost of child care for working families, support Wisconsin’s workforce, and expand access to affordable child care by making sure providers can keep their doors open, recruit and retain talented workers, and fill available slots.

According to a 2023 report released by Forward Analytics, child care costs can consume up to 36 percent of a family’s household income for parents under the age of 25 at the median income and 18 percent for parents between 25 and 44 at the median income. For a typical family with parents under 25 and two children in care, child care costs can reach as high as 70 percent of the household’s income. The report highlights that the cost of child care for two young children in Wisconsin is now more than the average rent or mortgage and exceeds the annual cost of tuition to send two students to the University of Wisconsin-Madison.

Gov. Evers is proposing to make substantial, meaningful investments in Wisconsin’s child care industry to help lower the cost of child care for working families, ensure child care providers can recruit and retain dedicated workers, and make child care more accessible by filling available slots and preventing further child care closures. The governor announced tonight that his 2025-27 Executive Budget will include ongoing funding to make the Child Care Counts Program permanent, including investing over $500 million aimed at lowering child care costs, supporting this critical industry, and investing in employer-sponsored child care.

The Child Care Counts Program has helped child care providers increase wages, provide benefits, and expand access to care for families. The program has helped more than 5,314 child care providers keep their doors open, ensuring the employment of 64,533 child care professionals and allowing providers to continue care for more than 364,280 kids. Unfortunately, due to Republican lawmakers’ refusal to provide funding for Child Care Counts in the 2023-25 biennial budget or in the subsequent special session called by the governor, the program is set to end by the end of June 2025.

Among several other provisions, the governor's more than $500 million investment aimed at lowering child care costs includes:

• $480 million to continue the successful Child Care Counts Program, which to date, has helped more than 5,314 child care providers keep their doors open, ensuring the employment of 64,533 child care professionals and allowing providers to continue care for more than 364,280 kids; and
• Over $5.5 million to support a new employer grant program aimed at supporting employers in responding to specific employee and community needs, such as on-site child care, child care subsidies, and employer contributions to a Dependent Care Flexible Spending Account for employees.

A full list of provisions included in the governor’s investment in child care services across the state is available here.

Failing to stabilize and invest in Wisconsin’s child care industry could have disastrous consequences for working families, the state’s workforce, and the state’s economy. According to a report from The Century Foundation, without additional continued investments, 2,110 child care programs are projected to close, resulting in over 87,000 children without child care in Wisconsin and the loss of over 4,880 child care jobs. Additionally, the lack of access to child care could potentially cause about half a billion dollars in economic impacts across the state.

LOWERING OUT-OF-POCKET COSTS FOR MEDICATION, IMPROVING OVERSIGHT OF DRUG COMPANIES, AND PROTECTING CONSUMERS FROM MEDICATION PRICE GOUGING 
Gov. Evers also announced in his 2025-27 Biennial Budget Message tonight that his 2025-27 Executive Budget will include over 10 policies aimed at reducing prescription drug prices, setting price ceilings for prescriptions, and improving oversight of drug companies to protect Wisconsinites from price gouging on medications. Among the governor’s proposals include removing the sales tax on over-the-counter prescriptions, through which Wisconsinites will see a projected total of $70 million in annual savings. Additionally, Gov. Evers is proposing to establish a $35 copay cap on insulin.

According to a 2023 national survey by KFF, more than a quarter of adults in America reported that it is somewhat or very difficult to afford the cost of their prescription drugs, with about 30 percent of adults reporting that they did not take their medications as prescribed in the past year due to cost. Additionally, a 2024 Public Policy Polling survey found that 89 percent of Wisconsin voters, including 84 percent of Republicans, believe that lowering costs for prescription drugs would help people afford the cost of living.

Gov. Evers announced tonight that his 2025-27 Executive Budget will:

• Establish the Office of Prescription Drug Affordability to oversee prescription drug regulations and further analyze and develop policies aimed at reducing prescription drug costs for Wisconsinites statewide. Provide 16 positions, $2 million in fiscal year 2025-26, and $1.9 million PR in fiscal year 2026-27 to create the Office of Prescription Drug Affordability and support this critical work;
• Lower everyday, out-of-pocket costs for Wisconsinites, including working families, seniors, and expecting parents by: 
• Making essential healthcare products more affordable and accessible by exempting over the-counter medications from sales tax. This will reduce sales taxes on consumers by $29.8 million in fiscal year 2025-26 and $40.8 million in fiscal year 2026-27. 
• Making basic family needs including diapers, incontinence products, menstrual products, and breast pumps exempt from sales tax. This will reduce sales taxes on families by $14.9 million in fiscal year 2025-26 and $20.4 million in fiscal year 2026-27. 
• Ensure insulin is affordable for Wisconsinites by establishing a $35 maximum copay cap for a month’s supply of insulin; 
• Establish an Insulin Safety Net Program to ensure those with an urgent need for insulin, as well as those with lower incomes and limited-to-no insurance coverage, have access to affordable insulin; 
• Establish a value-based diabetes medication pilot program to develop a value-based formulary, focus on medications that work, and reduce spending waste; 
• Require prescription drug cost reductions received from prescription drug manufacturer coupons and other discounts to count towards a plan holder’s deductible or out-of-pocket maximum. Only discounts for brand name drugs that have no generic equivalent and brand name drugs that have undergone prior authorization by a prescriber or the insurer are eligible in order to avoid incentivizing the purchasing of more expensive brand name drugs over their generic equivalents; 
• Require health insurance plans offered in the state to cover over-the-counter oral contraception to increase the accessibility and affordability of an essential component of women’s health. Health insurance plans would be prohibited from requiring an individual to have a prescription for the oral contraceptive in order to be provided coverage; 
• Improve oversight of drug companies by creating a Prescription Drug Affordability Review Board to oversee the pharmaceutical industry and drug market, analyze other state and national drug policies and practices, establish spending limits for public sector entities, and set price ceilings on price-gouging prescription drugs; 
• License and regulate entities involved in the prescription drug supply chain, including pharmacy benefit management brokers and consultants, pharmacy services administration organizations, and pharmaceutical sales representatives; 
• Require pharmacy benefit managers and other third-party payers to reimburse certain 340B drug discount program participants, specifically federally qualified health centers, critical access hospitals and Ryan White HIV/AIDS programs, at the same rate that non-340B program participants are reimbursed to end discriminatory reimbursement practices; 
• Require pharmacy benefit managers to owe a fiduciary duty to insurers and other payers with whom they contract; 
• Fully fund the Wisconsin Healthcare Stability Plan to stabilize the individual healthcare market and lower premiums for Wisconsinites; 
• Increase total funding for the Wisconsin Healthcare Stability Plan to $250 million in each fiscal year to reinsure high-cost individuals for all health insurers who offer individual plans. Allow the spending cap for the plan to be adjusted by the governor; 
• Create a Prescription Drug Importation Program that would allow the state to import drugs that would create substantial savings for Wisconsin consumers and taxpayers; and 
• Direct OCI to study the creation of a state prescription drug purchasing entity. 

This proposal builds on Gov. Evers’ efforts over the past six years, including creating the Governor’s Task Force on Reducing Prescription Drug Prices and previously introducing his “Less for Rx” plan. More on Gov. Evers’ efforts to make prescription medications more affordable is available here.