Back early in the century we gave our daughter a $50 gift card for her favorite local restaurant chain. While she spent most of her time in classes in Des Moines, she used the card during every visit home.
After a few meals she noticed something: the gift card value never dropped below $30. Time and again and again she used the card, the balance never wavered.
His Accidency Mike Parson and our current used car selling governor Mikey thought they had a lucky super gift card. Thanks to Trump I and Biden incentives to states, a pandemic windfall and a smattering of good luck, Missouri’s usually lean reserves climbed over $8 billion!
So, they used the gift card again and again.
Yes, the state constitution requires a balanced budget. Kind of. That extra $8 billion ought to have been largely untouchable…boy did it get touched.
As I’ve noted before, the official guess is that Missouri’s once $8 billion reserve shrinks to around $600 million by the end of this current Fiscal Year [6/30/26]. Again, as we’ve talked about, the legislature passed a number of bills reducing state income, including an end to state taxes on capital gains. A 100% tax credits to a questionable scholarship program and also pregnancy resource centers, plus a list of smaller things, further cut general revenue.
Now comers the Big Beautiful Bill. What passes for good news: most of the cuts to most safety net programs – which will shift better than $4 billion a year on the backs of Missouri general revenue – don’t start phasing-in till the fall of 2026 with some postponed to 2028. [N Y Times 7/6/2025, p. 17A] That’s a lifetime in government time, alas, as Sen. Joni Erst reminds us, everyone dies.
The bad news: the BBB tax cuts have already begun. The grand total remains in dispute but the smart money has Missouri losing $100 million to $200 million from federal changes impacting that Adjusted Gross Income line on the 2025 IRS forms. That loss, of course, is beyond the capital gains and tax credit stingers.
Doing the math, a state with a $51 billion budget may end this Fiscal Year with less than $400 million in reserves (and perhaps as little as $250 million). Round that up to one-half of one percent [0.5%] of the state budget.
Today I learned that some of the harshest safety net cuts may begin before the end of this year. Friends among the network of anti-hunger advocates have been closely reading the BBB. A rough consensus is emerging that some of the food stamp requirements may be getting phased-in 90 days after the BBB takes official effect on September 1, 2025. So 30 September days, 31 October Days, then 30 November days…Yup. Right after Thanksgiving (11/28 this year) Missouri and the other states probably have to apply the new rules on work requirements and other verification rules when families apply – or seek their periodic renewal – of SNAP benefits.
Well, Missouri does such a lousy job of handling food stamps that a federal judge lowered the boom. Since then, the situation has gotten worse. The Department of Social Services depends on mildly trained Call Center workers (a job title with a 100%+ annual turn-over rate) to handle most of food stamps and Medicaid. The workers can’t keep up. Plus, Missouri has an unacceptable error rate on processing food stamps. The BBB handles that by making state taxpayers foot the bill for a larger portion of benefit programs.
Remember I mentioned the state will be on the hook for $4 billion of general revenue money (which we don’t have) to keep food stamps and Medicaid going? That might hit $4.5 billion.
And, since the state does such a lousy job doing its job, many thousands – maybe hundreds of thousands – of deserving Missouri citizens will lose benefits they qualify to get and benefits they need. You know, luxuries such as food and medicine.
The state really needs a magic gift card. My daughter isn’t giving hers up. This will be painful.
Glenn Koenen