Missouri ‘difficult budget year’ echoes disastrous Kansas ‘tax experiment’ | Opinion
The Missouri General Assembly starts its 2026 session this week with one overriding mission: to fix the budget mess it made last year.
And it’s a big mess, folks.
Legislators last year passed a giant — controversial — capital gains tax cut at the behest of Gov. Mike Kehoe. They did so knowing that state revenues would drop somewhat: The expectation at the time was that state coffers would lose about $160 million this fiscal year as a result.
The actual number? Much closer to $500 million.
Oops.
Missouri Republicans — the folks who made this problem and are responsible for it — are going to have a “difficult budget year,” Dan Haug, the state budget director, told The Missouri Independent in December.
Don’t cry for Kehoe or his GOP buddies in the legislature, though. All of this was foreseeable.
Predictable? Predicted.
Why? Let’s start with the fact that Kehoe made his love of bad economic ideas eminently clear during his 2024 campaign for governor, allying himself with conservative voodoo economist Arthur Laffer.
You know — the same guy who helped Kansas Gov. Sam Brownback push the Sunflower State to the cusp of fiscal ruin a decade ago.
“When I’m governor, we’re going to cut taxes, spur economic growth, and put Missouri on the right path forward,” Kehoe said in a social media post featuring a picture of himself with Laffer.
If all of this makes you feel a little bit crazy, you’re not alone. Missouri leaders had a front-row seat for the fiscal and political fallout from Brownback’s “tax experiment” disaster. It was right next door!
But they failed to heed the warning. What’s that old saying about history repeating itself? Oh, that’s right: “The second time as farce.”
It’s not just that Missouri’s current budget predicament was predictable, though. It was predicted.
Back in April — before the capital gains tax cut was finalized — the left-leaning Institute on Taxation and Economic Policy estimated the first-year price tag would be “$600 million or more.”
That turned out to be a little bit of an overshoot. But it’s a lot closer to the truth than the $100 million shortfall that Missouri’s tax-cutters predicted. And that’s on top of the state budget challenges legislators are facing now that pandemic-era federal funding for states is drying up.
Again: Oops.
Budget cuts are likely
The question now: What happens next?
A budget hole like the one the Show-Me State now faces generally has three possible solutions: Raise taxes, slash the budget or find some mix of the two.
We already know Kehoe’s preference. It’s to cut taxes even more. His office told The Star in November that eliminating the state income tax entirely was a top priority for this year’s legislative session.
“Governor Kehoe believes eliminating Missouri’s income tax is critical to ensuring that Missouri is a competitive and thriving state for businesses and families,” Kehoe spokesperson Gabby Picard told The Star.
That leaves the other option: cutting services.
“We’re not going to be able to fund everything,” state Sen. Maggie Nurrenbern, a Kansas City Democrat, told St. Louis Public Radio last week.
What those cuts might entail is still vague. Kehoe will list his priorities during next week’s State of the State address.
It’s worth arguing, though, that it takes more than tax cuts to produce a “competitive and thriving” state.
Functional and funded government services help, too. Roads. Schools. That kind of thing.
But it’s not at all clear that Kehoe and Republican legislators understand the need for balance. We’ll find out starting Wednesday.
