Missouri Budget

Missouri lawmakers arrive in Jefferson City on Wednesday for the start of the 2026 legislative session, which runs until mid-May. Gov. Mike Kehoe is pushing to eliminate the state income tax, but a smaller budget will likely force spending cuts.

Missouri lawmakers have passed historically expensive budgets in recent years, but next year will likely be different, according to Missouri state Sen. Maggie Nurrenbern, a Democrat from Kansas City. The state's revenue has flatlined when adjusted for inflation, and there is no more surplus of federal money. Nurrenbern said that math means Missouri won't be able to fund all the services it has in prior years.

The fund held $5.8 billion, a record, at the end of June 2023. Without changes to the budget, State Auditor Scott Fitzpatrick warns, the money will all be gone by June 2028.

Missouri Gov. Mike Kehoe’s desire to eliminate the state income tax is an ambitious goal given the projected $1 billion shortfall in general revenue next fiscal year. He joined KCUR’s Up To Date to discuss how the plan could take shape.

This year, Missouri became the first state in the country to tax income, but not capital gains. That could present a challenge as the state prepares to face a budget shortfall.

Missouri's capital gains tax cut will apply to all gains since Jan. 1, and will be reflected in the income tax returns due in April. It's the first state to exempt profits from the sale of assets such as stocks, real estate, and cryptocurrency from income taxes.

The governor’s budget vetoes included money for tutoring programs, road infrastructure improvements, workforce development, food assistance and arts organizations. "These losses are huge," says Arts Asylum director Evie Craig.

Months after area arts and culture nonprofits saw a loss of funds from the National Endowment for the Arts, Gov. Mike Kehoe has vetoed millions more in state support.

The governor's office cited some unexpected budget items, and a recently passed bill eliminating Missouri's capital gains tax, as reasons for reducing spending. His largest veto was over $1 billion for a road construction program.

In addition to legislation addressing the Kansas City Royals and Chiefs' stadiums, the special session will also focus on tornado relief for St. Louis and several projects that failed to get funded at the last minute.

When lawmakers return to Jefferson City in June to debate Gov. Kehoe's plan to finance stadium projects for the Chiefs and Royals in Kansas City, more than 60 groups slated for funding want him to revisit spending for items spiked in the Missouri House.

The Missouri House declined to pass one budget bill that contained hundreds of millions of dollars for capital improvement projects across the state. Now that proposed funding is effectively dead for the session.