A bit before the state constitution’s deadline of May 8th, the Missouri legislature passed a budget for Fiscal Year 2027 – July 1, 2026, till June 30, 2027.
Of course, the Republicans congratulated themselves on a job well, and timely, completed.
About that…
Obviously, no budget for an enterprise as big as the state of Missouri – $50.7 billion list price – will hit the center of the target. A kaleidoscope of variables impacts revenue and expenses. Predicting what will happen basically 15 months in advance gets tricky too.
Yet, even with that wiggle room this session’s budget will wobble off the baseline before it even takes effect. Let’s look at three of the issues:
- The legislature’s budget added big things to the governor’s proposal. Gallantly, the GOP majorities restored money for services to citizens with special challenges. And, the Representatives and Senators shifted money from Capitol project to things helping people. Remember, however, that Governor Mike Kehoe can use his line item veto to cross-out things he doesn’t like. (Yes, the legislature will meet in mid-September to look at overrising his vetoes, but, even with veto proof supermajority the Republicans won’t anger their governor with an official rebuke.) Plus, Missouri governors have a history of just not spending money when they don’t want to. They can do a formal withhold, declare that revenue won’t cover the expense, or, just say no to their cabinet spending the money.
- The General Revenue money the legislature counts on won’t all show up. At the close of business on May 20, 2026 Fiscal Year To Date General Revenue collections were 2.79% BELOW the same date last year! To meet this year’s budget General Revenue had to nudge up a bit. Starting the new year, as they will, in a downturn doesn’t offer much hope for meeting next year’s target.
- The great majority of Missouri’s budget comes from Washington, D. C. sources. Most of the money for Medicaid (a.k.a. MO HealthNet), much of the highway money, funds for virtually all of the Missouri National Guard expenses and so much more gets funneled to Missouri from the federal government. Pretty much across the board, the One Big Beautiful Bill Act tightens that faucet. In coming years Missouri must cover a greater portion of health care, a big chunk of food stamps (about $1.2 billion in benefits to Missourians a year) and all sorts of other costs. How much more is still in process but a grand total in the billions of dollars seems very, very possible.
In other words, that enacted budget as it stands now qualifies as fiscal fiction.
Now, our state elected officials know all about these issues. In anticipation of these challenges what did they do?
The Missouri legislature passed a resolution to murder the state income tax, the source of $9 billion in state General Revenue.
Yes, when money gets tight the answer it to give away the largest single source of state-generated funds you have. That’s The Missouri Way.
Glenn
