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Bill

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)

May 2026 Special Session

SB 1 would provide tax relief for tipped workers and overtime pay while boosting state funding for K-12, special education, school-age parents programs, and technical colleges.

Fiscal estimate received
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Bill Summary · SB 1

Summary of Bill: SB 1 (Session 2026S1, Wisconsin)

Purpose and intent

SB 1 proposes a multi-faceted package aimed at:
- Providing targeted tax relief for workers (through an income tax subtraction for qualified tips and for qualified overtime compensation).
- Adjusting state support for K-12 and higher education systems (state aid to school districts, and state aid to technical colleges and the technical college district revenue limit).
- Modifying surplus refund payments.
- Increasing funding for special education and school-age parents programs.
- Making an appropriation to support these initiatives.

The overarching goal is to adjust tax treatment for certain earnings while expanding and directing state funding to education-related programs and institutions, with supplemental fiscal provisions.

Key provisions and changes

  1. Income tax subtraction

    • Adds or expands an income tax subtraction for:
      • Qualified tips received by workers (to reduce taxable income by tip amounts that meet criteria).
      • Qualified overtime compensation (additional pay for overtime that qualifies under specific rules).
    • Purpose: provide tax relief to employees whose earnings include tips or overtime pay.

  2. State aid for school districts

    • Adjustments or expansions to state aid allocations to school districts.
    • Details likely include formulas or appropriation levels to support local K-12 funding, teacher pay, special education, or other district needs, consistent with the bill’s education emphasis.

  3. Surplus refund payments

    • Provisions governing how surplus state funds are refunded.
    • May specify timing, eligibility, and method for distributing surplus refunds to residents or municipalities.

  4. Increased funding for special education and school-age parents programs

    • Increases in state funding for:
      • Special education programs serving students with disabilities.
      • Programs addressing the needs of school-age parents (students who are parents, to support continued education and resources).

  5. State aid to technical colleges and related revenue limits

    • Changes to state aid for technical colleges.
    • Adjustments to the technical college district revenue limit, potentially affecting how much revenue districts may raise and state aid interactions.
    • Aims to bolster funding for technical college systems and align revenue provisions with education goals.

  6. Appropriation

    • The bill includes an appropriation to fund the above provisions.
    • Specifies the total funding level or authorizes spending as needed to implement the program changes.

Who would be affected

  • Taxpayers with tipped income and overtime earnings: eligible for an income tax subtraction reducing taxable income.
  • Public school districts and students: through adjusted or increased state aid; potential impact on local budgets and programming.
  • Students and families in special education and school-age parents programs: increased state funding and support services.
  • Technical colleges and districts: changes in state aid and revenue limits, influencing operating budgets and capacity.
  • General residents: potential surplus refund timing and amounts, depending on state fiscal conditions.

Procedural and timeline aspects

  • The bill was introduced by the Joint Committee on Finance and underwent a standard legislative process:
    • Public hearing held (May 12, 2026).
    • Executive action by the Joint Committee on Finance with a recommendation to pass (Ayes 12, Noes 4).
    • The bill advanced through readings and was placed on or moved through the calendar in mid-May 2026.
  • Status noted: “Failed to pass pursuant to Senate Joint Resolution 1,” suggesting that, at the time of reporting, the bill did not complete passage through the chamber by the specified procedural path in the session, though the exact final disposition would require checking the latest legislative records.

Potential fiscal considerations

  • Tax reductions for tipped workers and overtime earners could affect state revenue in the near term.
  • Increased and reallocated education funding implies higher state expenditures, offset by the appropriation in the bill.
  • Changes to surplus refunds would influence short-term cash flows and resident refunds depending on available surplus.

What to watch for

  • Final passage, amendments, and the exact numeric details of the subtraction amounts, eligibility, and revenue-limit changes.
  • How the education funding formulas interact with existing aid and district revenue limits.
  • Budgetary impact assessments from the Legislative Fiscal Bureau for a clearer fiscal picture.

Compiled from official sources — confirm details with the bill’s official record.

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