The Sconi

The 2025-2027 Wisconsin State Budget includes several tax cuts, following a legislative session that concluded with the state facing a $4 billion surplus. The National Federation of Independent Business (NFIB) supported using much of this surplus to reduce taxes. Lawmakers ultimately approved measures that will lower the overall tax burden by $1.5 billion.

One change expands the second lowest income tax bracket, so individuals earning more than $29,370 and couples earning more than $39,150 will pay a reduced rate. Another provision introduces a new exemption for retirement income, allowing people aged 67 or older to exclude up to $24,000—or up to $48,000 for married joint filers—from state taxes. This exemption covers various sources such as pensions, IRAs, and 401(k) accounts.

Additionally, the budget removes the state's 5% sales tax on residential natural gas and electricity. This move is expected to save taxpayers approximately $178 million over two years.

Lawmakers from both parties reached an agreement on these changes. Governor Evers signed the budget into law in early July.