Wisconsin tax collections 2% higher than expected, putting budget surplus at nearly $3 billion

The state of Wisconsin collected $23.13 billion in taxes in the 2025-25 fiscal year, a 3.4% increase from the prior year, according to a preliminary report released Thursday by the Department of Revenue.

The amount collected was $450.8 million above the $22.6 billion that the DOR projected the state would collect earlier this year, a 2% gain. 

The state brought in $231.3 million more than expected in income taxes as well as $79.9 million more than expected in the general sales and use tax and $83.9 million more than expected in the corporate income tax. 

The higher than projected revenue could grow the state’s budget surplus to over $3 billion in a critical election year and ahead of the next state budget process. Legislative Fiscal Bureau estimated in January that the state would finish the 2025-27 biennium with a nearly $2.5 billion surplus. 

State Sen. Howard Marklein (R-Spring Green), who co-chairs the Joint Finance Committee, said in a statement that he is “not surprised” by the latest numbers. 

“I have been watching the revenue numbers each month and they were indicating we would have a larger surplus than originally thought,” he said, adding that he is disappointed lawmakers could not pass a bipartisan agreement negotiated by Gov. Tony Evers and Republican lawmakers earlier this year. 

Following the initial projection, Evers and GOP lawmakers negotiated a $1.8 billion school funding and tax cut deal that would have provided additional special education funding to schools, property tax relief through the school tax credit, $600 rebate checks and the elimination of taxes on tips and overtime. The deal failed in the state Senate in May.

“Our families and taxpayers could use the relief now,” Marklein said.

Rep. Mark Born (R-Beaver Dam), co-chair of the Joint Finance Committee, said in a statement that he would be open to returning to session to do something with the surplus soon.

“If  we can reach an agreement that delivers meaningful tax relief for Wisconsin families and can pass both houses, I’m ready to get it done,” he said. 

Without further action, the surplus will be dealt with by the next governor and state Legislature. Control of both are up for grabs in November. 

U.S. Rep. Tom Tiffany, the Republican gubernatorial candidate, said in a post on social media that the growth in the state’s budget surplus is a sign that Wisconsin residents are being overtaxed. He claimed that his Democratic opponent, Milwaukee County Executive David Crowley, would keep the surplus in Madison and “make government bigger.” 

“I’ll send every dollar of the surplus back to you and deliver permanent tax relief for working families,” Tiffany said. Tiffany lobbied Republicans in the state Senate to vote against the earlier deal, which contributed to its defeat.

Crowley said in a statement about the surplus that he would “consider the long-term investments we can make and work with the legislature to bring costs down for all Wisconsinites.” 

“What I won’t do is defund our schools, our healthcare system, or the basic services working families rely on like Congressman Tom Tiffany has done his entire political career,” he said.