Missouri governor cuts $493 million in projects approved by lawmakers
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- Kehoe vetoed $52 million and restricted $441 million from the enacted budget.
- Kehoe signed a roughly $50 billion budget while trimming $493.3 million in projects.
- State projections show surplus funding depleted and deficits expected by fiscal 2028.
Missouri Gov. Mike Kehoe trimmed $493.3 million from the state budget lawmakers approved in May, as Missouri approaches a grim financial future in budget projections.
Kehoe, a Republican, signed the state’s roughly $50 billion budget into law Tuesday afternoon. The budget funds projects and government operations for the next fiscal year, which begins on Wednesday.
In signing the plan, Kehoe also vetoed $52 million in projects approved by lawmakers and restricted another $441 million.
Those cuts included $500,000 that was slated for the National World War I Museum and Memorial in Kansas City and $2.5 million for artificial intelligence development.
In a statement, Kehoe said the cuts were necessary to get Missouri’s finances back on a sustainable path. For several years, the state has spent more than it collected in revenue, buoyed by COVID-era federal funding that injected additional money into state coffers.
Kehoe thanked Missouri lawmakers for “their partnership in passing a budget that reflects our shared commitment to fiscal discipline and responsible stewardship of taxpayer dollars.”
“After several years of historic growth in spending, this budget funds smart and necessary investments, while also taking an important step toward right-sizing government to ensure Missouri remains positioned for long-term success,” Kehoe said.
Kehoe said that the state has a “spending problem” that is outpacing growth in the economy.
“Our work doesn’t end with balancing this year’s budget. By maintaining fiscal discipline and continuing to grow Missouri’s economy, we are building the foundation for an even more strong and resilient Missouri,” Kehoe said.
Critics disagree and say that Missouri’s recent tax cuts have primarily benefited the wealthy at the expense of state capacity. The Missouri Budget Project, a left-leaning think tank that analyzes the state’s budget and tax policy, said that federal funding “masked the full impact of these tax cuts.”
Missouri lawmakers entered the legislative session predicting a painful budget year. In the end, the budget that lawmakers sent to Kehoe’s desk spends $374 million less in general revenue than what the governor requested in January but still $2 billion more than what the state collects in revenue.
The top-ranking Democrat on the Missouri House Budget Committee acknowledged that Kehoe appeared to be “somewhat intentional” in how he cut certain projects from the budget.
However, Rep. Betsy Fogle of Springfield, said she was concerned that the governor did not cut enough, pointing to the state’s dire financial situation and the Republican-backed push to eliminate the state income tax.
“I feel like we punted a lot of these hard decisions,” said Fogle, who is running for state Senate. “Overall, I think we are in for some difficult budget years.”
Fogle said Republicans, including Kehoe and state lawmakers, want to operate a “high spend, low tax” government, which she framed as unsustainable.
Missouri’s time relying on deficit spending is coming to a close. Surplus funding that the state has relied on since is projected to be depleted by fiscal year 2028.
State Auditor Scott Fitzpatrick, a Republican, encouraged Kehoe to make additional cuts in a report on state finances earlier this month. In a report, Fitzpatrick projected that the state will be in the red by fiscal year 2028, which begins on Wednesday.
“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.
