An Act to renumber and amend 71.21 (6) (a), 71.27 (1) and 71.27 (2); to amend 20.255 (2) (b), 71.06 (1r) (d), 71.06 (2) (k) 4., 71.06 (2) (L) 4., 71.07 (7) (c), 71.23 (2), 71.35, 71.365 (4m) (a), 71.46 (1), 71.46 (2), 71.46 (3), 71.745 (2) (a), 115.882 and 121.92 (1); to create 16.5187, 20.255 (2) (ks), 25.17 (1) (om), 25.492, 71.06 (1r) (e), 71.06 (2) (k) 5., 71.06 (2) (L) 5., 71.27 (1) (b), 71.27 (2) (b), 73.03 (78), 119.44 (2) (e) and (f), 120.18 (1) (cm) and (cp), 121.07 (2) (am) and (an), 121.24, 121.90 (1) (h) and (i) and 121.90 (2) (am) 6. of the statutes; Relating to: modifying the income and franchise tax rate structure for individuals and corporations, creating a school aid fund, supplemental school aid, school district revenue limits, and making an appropriation. (FE)
AB1209 would substantially revise Wisconsin’s income and franchise tax structure and direct the additional revenue to K-12 education. For individual income taxes, it raises the top existing marginal rate from 7.65% to 8.65% for tax year 2025 and to 8.85% thereafter, and it creates a new top bracket for high-income taxpayers: 17.30% in 2025 and 17.70% after 2025 for income above $750,000 for single filers, $1,000,000 for joint filers, and $500,000 for separate filers. For corporations, pass-through entity tax filers, and related entity-level election provisions, the bill adds a new bracket for income above $1,000,000 at the same 17.3%/17.7% rates while leaving income below that threshold at 7.9%.
The bill creates a new nonlapsible school aid fund and requires the Department of Revenue to calculate the extra revenue generated by the higher tax rates and transfer that amount from the general fund into the school aid fund. The Department of Public Instruction would then distribute the money annually to school districts as supplemental school aid based on each district’s share of the statewide school property tax levy in 2024-25. The bill also treats this supplemental aid as state aid for school revenue-limit purposes and limits revenue-limit penalties when state aid exceeds a district’s limit.
AB1209 also changes several school funding formulas. It increases the weighting of low-income pupils and limited-English proficient pupils from 1.0 to 1.2 in general aid and revenue-limit calculations, with pupils counted in both categories weighted at 1.4. It adds new reporting requirements for districts to report counts of low-income and limited-English proficient pupils, and it creates new “supplement” calculations that phase into revenue-limit membership counts beginning in 2026-27. In addition, the bill changes special education reimbursement so that, after full payment of certain hospital and convalescent-home costs, remaining eligible special education and school-age parents program costs are reimbursed at 90% rather than being limited by the available appropriation.
The overall sentiment reflected in the bill text and available history is policy-driven and fiscally significant, but no committee transcript or vote record is available here to show debate or partisan alignment. The structure of the bill suggests a strong education-funding emphasis, with the tax increases explicitly tied to school aid and special education reimbursement. Because the bill was only introduced and had received a fiscal estimate, there is no recorded vote outcome or formal committee position in the provided materials.
The main points of contention likely center on the higher tax burden on upper-income individuals and larger businesses versus the proposed increase in school funding. Supporters would likely emphasize dedicated education revenue, higher special education reimbursement, and additional aid for districts serving low-income and English learner students. Opponents would likely focus on the steep new top tax brackets, the impact on business competitiveness, and whether tying school funding to tax increases is the best long-term budget approach.
AB1209 would amend Wisconsin’s tax code by creating new high-income brackets for individual income tax, corporate income tax, the franchise tax, and pass-through entity taxation, while also adjusting related credit and entity-level election provisions to reference the new rates. It would establish a new school aid fund, require annual transfers of the incremental revenue generated by the tax changes, and create a supplemental school aid program distributed to districts by formula. The bill would also alter school district revenue-limit calculations, pupil weighting for low-income and limited-English proficient students, reporting requirements, and special education reimbursement rules, thereby affecting both state revenue law and K-12 finance statutes.
The available materials suggest the bill is framed as a major education-funding measure financed by tax increases on higher earners and larger business income, rather than as a narrow tax adjustment. Because there are no committee transcripts or votes provided, there is no direct evidence of floor or committee sentiment. Based on the bill’s design, the likely support would come from those prioritizing school funding and targeted aid, while likely opposition would come from taxpayers and business interests concerned about rate increases and bracket expansion.
The central contention is the tradeoff between raising revenue through substantially higher top marginal tax rates and directing that revenue to schools. Likely supporters include education advocates, school districts, and groups favoring more aid for low-income students, English learners, and special education. Likely critics include high-income taxpayers, corporations, pass-through businesses, and tax policy advocates who may argue the new rates are too steep, could reduce competitiveness, or create volatility in revenue. Another possible point of debate is the formula-based distribution of supplemental aid, which ties funding to historical school property tax levy shares rather than current need alone.