THU AM News: Report: Nixing tax on tips, overtime would reduce state collections by $2.7 billion over 10 years

October 15, 2026

— Changing Wisconsin law to mirror the federal law exempting tips and overtime from the income tax would reduce state collections by $2.7 billion over the next decade, according to a new report from Forward Analytics.

Still, that boost in take-home pay for those who are impacted could boost consumer spending. The report also found the change could create an incentive to move toward wage structures more reliant on tips or overtime to take advantage of the exemption.

Forward Analytics is an arm of the Wisconsin Counties Association.

This session, Dem Gov. Tony Evers vetoed a GOP bill to exempt tips from the state’s income tax. The governor and GOP legislative leaders then included provisions in a $1.8 billion surplus package that would have exempted tips and overtime from the state income tax. That legislation cleared the Assembly but failed in the Senate when all 15 Dems and three majority Republicans voted against the proposal.

According to the report, if implemented, there would be a $716 difference in the tax liability for two Wisconsin workers each earning $40,000 annually. That’s if one made $15,000 of their income from tips while the other’s earnings were solely from traditional wages.

Meanwhile, those making between $85,000 and $132,500 a year would see the biggest benefit, assuming a certain share of tipped income.

When the $1.8 billion budget surplus package with the exemption for tips and overtime was proposed, the Legislative Fiscal Bureau estimated the chance would reduce individual income tax collections by $232.8 million in 2026-27 and $197 million in 2027-28.

The Forward Analytics report projected what the impact would be between 2028 and 2037.

Read the report.

— A new report from two conservative groups recommends Wisconsin disincentivize retiring coal plants for new solar and wind development and tie executives’ bonuses to ratepayers’ cost savings.

The “energy agenda” from the Wisconsin Institute for Law & Liberty and Americans for Prosperity also proposes giving large energy users, like data centers, more leeway to build their own power outside the grid.

WILL Policy and Government Affairs Manager Sam Krebs in a statement said the energy agenda offers “practical changes” to meet the state’s growing energy needs.

“The status quo is not working. We need more competition and stronger oversight to keep bills down and make sure people have power when they need it,” Krebs said.

Several policy recommendations seek to limit the development of new renewable power, which the report attacks as unreliable and propped up by government subsidies.

That includes limiting the return a utility can receive from building wind and solar developments and creating a “baseload-for-baseload” law that would require utilities replace retiring baseline generation with other “always-on” capacity.

“Wind and solar do not count toward the replacement, because they are intermittent,” the report notes.

It also calls for the Legislature to conduct an audit to “evaluate and eliminate all grants, programs or mandates… that subsidizes a particular energy source,” citing the federal solar Investment Tax Credit as an example.

RENEW Wisconsin Communications Director Alex Beld criticized the report for ignoring that the federal government also subsidizes oil and gas production.

“It is difficult to take their numbers in good faith if they are not pointing out subsidies for both sources of energy,” Beld said.

He said RENEW was neutral on allowing large energy users to build their own power, but would prefer it be renewable power, particularly for facilities in populated areas that could otherwise contribute to air pollution.

Read the energy agenda here.

— The Wisconsin Farm Bureau Federation says two proposed extra high-voltage transmission lines in southern Wisconsin could impact more than 3,000 of its members.

Farm Bureau leadership expressed concern about the planned MariBell and BECI transmission lines in a statement yesterday, saying the transmission lines could cost Farm Bureau members around half a million dollars per year.

The Farm Bureau estimates landowners would see crop losses of $2,330 per mile, per year tied to the transmission towers, leading to around $450,000 in lost agricultural production per year.

That’s in addition to potential costs associated with the transmission towers, like soil compaction, drainage disruptions, insurance increases and reduced operational efficiency.

“Wisconsin agriculture understands the importance of reliable and resilient energy infrastructure,” Farm Bureau President Brad Olson said in a statement. “Farmers, like all Wisconsinites, depend on it. But recognizing the importance of reliable electricity does not mean that infrastructure of this magnitude should advance without a clear demonstration that it is necessary, properly located and worth the costs it imposes on Wisconsin ratepayers and the people whose land, livelihoods and communities will bear its impacts.”

He also said it would be “premature” for the projects to move forward until farmers’ concerns are addressed.

Developers for both transmission lines emphasized they were committed to addressing landowners’ concerns.

A spokesperson from MariBell developer Dairyland Power Cooperative emphasized the utility planned to use an existing transmission corridor and said the transmission lines “are compatible with agricultural land uses and have little impact on typical operations.”

Midcontinent Grid Solutions Director of Engagement Brian Radday emphasized the BECI developer had not finalized the power lines’ route.

Read the Farm Bureau’s statement here.

— The Legislature’s Study Committee on Cryptocurrency meets this morning.

Ahead of the meeting, the Leg Council prepared a memo on potential legislation related to stablecoin, a type of cryptocurrency designed with its price tied to a real-world asset, such as a government currency or a physical asset such as oil or gold.

Some of the options Leg Council laid out for the study committee include:

Authorizing the use of stablecoins by government agencies for payments to vendors.
Creating a framework for transactions involving digital assets that would facilitate the use of stablecoins in commerce.
Creating a statutory framework to regulate stablecoin issuers, like under the federal GENIUS Act that President Donald Trump signed into law last year.

Today’s agenda includes hearing from state Treasurer John Leiber, the Wyoming State Token Commission and the Crypto Council for Innovation.

Watch the committee on WisconsinEye.

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