MADISON, Wis. (AP) — When the Wisconsin Legislature returns to work in January, Republicans will still be in charge but will have the narrowest majorities since taking control in 2011. That’s giving Democrats, including Gov. Tony Evers, optimism that both sides will be able to work together better than they have since Evers took office six years ago.

Both sides are eyeing the state’s massive budget surplus, which sits at more than $4 billion. What to do with that money will drive debate over the next two-year budget, which will be written in 2025, while questions hang in the air about whether Evers plans to run for a third term in 2026 and how the state will interact with President-elect Donald Trump’s administration.

Here is a look at some of the biggest pending issues:

New dynamic in the Legislature

Democrats gained seats in the November election because of redrawn maps ordered by the Wisconsin Supreme Court. The Republican majority now sits at 54-45 in the Assembly and 18-15 in the Senate. Democrats have 10 more seats in the Assembly than last session and four more in the Senate and are hopeful about gaining the majority after the 2026 election.

“We have already seen a shift in the Capitol due to the new maps,” Assembly Democratic Minority Leader Great Neubauer told The Associated Press.

She and other Democrats predict it will lead to more pressure from rank-and-file Republicans in competitive districts to move to the middle and compromise with Democrats.

“Everybody understands, at least at this point, that we we need to work together, pull together,” Republican Senate Majority Leader Devin LeMahieu told the AP. “And it’s important to get some things done.”

Pushing back against President Trump

Democrats say they have been talking with Evers and Democratic Attorney General Josh Kaul about how Wisconsin can push back against the Trump administration’s plans for mass deportations. But Democrats say they are also looking at other ways the state can fight Trump’s policies on issues like abortion and LGBTQ+ rights.

“We’re worried about a lot of the things that former and future President Trump might do, especially when it comes to deportation and immigration,” Senate Democratic Minority Leader Dianne Hesselbein said.

Republicans prioritize cutting taxes. Democrats are open

Republicans passed a $3.5 billion tax cut that Evers gutted to just $175 million with his veto in the last budget. With another large surplus, Republicans say they want to try again.

“People struggling to pay their bills,” LeMahieu said. “We heard that in our local races. And so we want to help help help families out there. We have the money to do it. And that’s going to be our number one priority.”

He said he would like a tax cut of around $2 billion.

Democrats say that they aren’t opposed to cutting taxes, but that they want it to be targeted to helping the middle and lower classes and families.

“We are not interested in tax cuts that primarily benefit rich Wisconsinites or corporations,” Neubauer said. “But we are certainly open to tax cuts that help those who are struggling to make ends meet.”

K-12 education funding

The state superintendent of schools, Jill Underly, proposed spending more than $4 billion on K-12 schools in her budget proposal, which is subject to legislative approval. That’s almost certainly not going to happen, both Republicans and Democrats said.

“We’re not going to spend $4 billion on education, I can guarantee you that right now,” LeMahieu said.

While Democrats say they are prioritizing education funding, “I don’t think we’re going to be able to match that,” Hesselbein said of the $4 billion request.

University of Wisconsin

Leaders of the cash-strapped Universities of Wisconsin have asked for $855 million in additional funding in the next budget, nearly an 11% increase. System President Jay Rothman says schools need the money to stave off tuition increases, cover raises, subsidize tuition, and keep two-year branch campuses open in the face of declining enrollment and flat state aid.

Evers has promised to include the request in his budget, but Republican leaders said they would not approve that much, and Democrats also said it was a goal that was unlikely to be met.

LeMahieu said the university needs to rethink spending levels in the face of declining enrollment.

“We’re going to need to see some substantial change in how they’re doing their programing,” LeMahieu said. “We can’t just keep spending more and more on a system that’s educating less and less people.”

Democrats say they will continue to push for ways to expand and reduce costs for child care, health care for new mothers and prescription drugs. Both Republicans and Democrats say they want to do more to create affordable housing. The future of the state’s land stewardship program also hangs in in the balance after the state Supreme Court said Republicans were illegally blocking funding of projects.

Democrats also say they hope to revive efforts to legalize medical marijuana, an effort that was backed by some Republicans but that failed to pass last session.

Bauer is the AP’s Statehouse reporter covering politics and state government in Madison, Wisconsin. He also writes music reviews. Richmond is an Associated Press reporter covering Wisconsin politics and courts as well as environmental issues and breaking news across the Great Lakes region. He is based in Madison.