Missouri Auditor warns of looming deficit. Could governor slash spending?
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- Missouri Auditor Scott Fitzpatrick warned the state is heading toward a financial cliff.
- The audit says Missouri’s surplus fund will be exhausted by fiscal year 2028.
- Gov. Mike Kehoe has until July 1 to cut the budget with line-item vetoes.
Missouri is heading toward a financial cliff, Missouri State Auditor Scott Fitzpatrick announced in a scathing audit that could open the door for major cuts to the state’s operating budget.
The state has been blowing through its surplus fund from years of deficit spending. Between fiscal years 2020 through 2025, the state increased general revenue spending by 53.4%, more than doubling the rate of inflation over the same period.
The state is expected to have depleted its entire surplus fund by fiscal year 2028. The Missouri Constitution prohibits the state from borrowing money to make up for deficit spending. If the surplus is depleted, it could lead to emergency budget cuts.
“The numbers are right there in black and white, and unfortunately lots of red, and they show a trend of deficit spending that cannot be sustained and that continues to jeopardize our state’s financial health,” Fitzpatrick said in a statement.
The Fiscal year 2027 budget passed increased appropriations from the general revenue from the previous year by about $66 million.
Fitzpatrick urged Gov. Mike Kehoe, a Republican, to take action to get state spending aligned with the revenue it takes in. State lawmakers passed budget bills last month, but they’re still awaiting approval by Kehoe.
Kehoe has the authority to line-item veto pieces of spending in the budget. Gabby Picard, a spokesperson for Kehoe, said the governor’s office is reviewing the budget currently for potential line-item vetoes and spending restrictions to rein in the budget.
“Governor Kehoe appreciates the support of Auditor Fitzpatrick and joins him in recognizing that these steps will again be necessary to reduce spending and prepare for the difficult budget years ahead,” Pickard said.
Rep. Mike Steinmeyer, a Sugar Creek Republican on the House Budget Committee, said the audit report isn’t surprising. He said the state became “addicted” to federal dollars and that the state will need to be fiscally disciplined in the coming years to address the deficit.
“The state of Missouri has had a lot of federal money coming through it, that’s dried up,” Steinmeyer said. “Now we’re looking at a budget that is going to be challenging in the next few years.”
Steinmeyer said he believes the current year’s budget was a good start to tightening the state’s belt, but that the state will have to “take bigger bites of the budget next year, and it’s probably going to continue.”
Rep. Kemp Strickler, a Lee’s Summit Democrat on the House Budget Committee, says Missouri’s budget woes are in part “self-inflicted wounds.” He pointed to the repeal of the capital gains tax, which cost the state $500 million, considerably more than lawmakers estimated.
“I think some of these things are a direct result of some of the policies that we have voted in place and now we are going to be feeling it, and having to make some very tough cuts in upcoming years,” Strickler said.
Kehoe has until the start of the new fiscal year on July 1 to further cut the budget lawmakers approved.
