The battle over taxes is once again center stage in Madison, as Democratic Governor Tony Evers and Republican legislative leaders clash over how and when to deliver tax relief to Wisconsinites.

Evers reaffirmed this week that any tax cut agreement must be included in the broader state budget, not passed as standalone legislation. “We just can’t do things one way and then… do taxes and then do spending, we have to look at it together,” he said during an Earth Day event. GOP leaders, however, are angling to pass tax cuts ahead of the full budget process.

This disagreement underscores the friction between a Democratic governor and a Republican-controlled Legislature. Talks are underway — Evers has met with Senate Majority Leader Devin LeMahieu and Assembly Speaker Robin Vos — but the path to compromise remains uncertain.

Vos said he’s open to continued discussions and recognizes the need to account for Evers’ budget priorities. “The goal, again, is to try to find something that can actually get across the finish line,” he said.

LeMahieu remained tight-lipped but reiterated his focus on tax relief through the budget process. Previously, he supported cuts targeting the third-highest tax bracket, while Vos has advocated for tax exemptions on retirement income.

Adding to the uncertainty is a dip in income and sales tax collections in March, prompting caution among Democrats. Senate Minority Leader Dianne Hesselbein pointed to national economic instability, warning that it could limit the scope of any tax relief.

This isn’t the first tax standoff under Evers’ watch. Last session, he vetoed a $3.2 billion GOP tax cut plan that included broad income tax rate reductions and retirement income exemptions. Evers called it “fiscally irresponsible,” citing concerns it would undermine the state’s ability to fund essentials like schools and prisons.

Despite the veto, Evers did sign a more vary narrow and targeted tax relief measure: an expansion of the state’s childcare tax credit, passed with bipartisan support. 

With a projected $4.3 billion budget surplus and divided government, the next few months will test whether Wisconsin leaders can bridge ideological divides to deliver meaningful tax relief.