Assembly Bill 1209 proposes significant modifications to the income and franchise tax rate structure for individuals and corporations in Wisconsin. The bill increases the highest marginal tax rate for the individual income tax from 7.65% to 8.65% for the 2025 taxable year and to 8.85% for subsequent years. It also introduces a new 5th tax bracket for high-income earners, setting the rate at 17.30% for 2025 and 17.70% thereafter. Additionally, a new corporate income tax bracket is established for income exceeding $1,000,000, with the same rates as the new individual bracket. The bill mandates the Secretary of Revenue to calculate the additional tax revenue generated from these rate changes and transfer that amount to a newly created school aid fund.

In terms of education funding, the bill stipulates that the Department of Public Instruction will distribute the funds from the school aid fund to school districts based on their proportional share of the statewide property tax levy. It also modifies how low-income and limited-English proficient pupils are counted for general school aid and revenue limit calculations, increasing their weight in these formulas. Furthermore, the bill enhances the reimbursement rate for special education costs from 42% to 90% of eligible costs starting in the 2025-26 school year. Overall, the bill aims to increase funding for education while adjusting tax rates for higher-income individuals and corporations.

Statutes affected:
Bill Text: 20.255(2)(b), 20.255, 71.07(7)(c), 71.07, 71.23(2), 71.23