Missouri Governor Mike Kehoe has signed the Fiscal Year 2026 (FY26) state operating and capital improvement budget into law, while also issuing significant vetoes and expenditure restrictions aimed at preserving fiscal responsibility and protecting taxpayers.
The approved budget totals $50.8 billion, including $15.4 billion in general revenue. However, Governor Kehoe vetoed 208 items totaling nearly $300 million in general revenue and implemented 32 spending restrictions worth an additional $211 million. These actions were taken in response to nearly $775 million in added spending by the General Assembly—much of it exceeding the Governor’s original recommendations.
Key Investments in the FY26 Budget:
- Public Safety: $10 million for local law enforcement through the Blue Shield Program, $7 million for fentanyl testing in school wastewater systems, and $2 million for sheriff retirement support.
- Economic Development: $91 million for rural road improvements, $10 million to expand childcare access, and $11 million for career and technical education upgrades.
- Agriculture: $55 million in bonding for State Fair improvements, $800,000 for Missouri FFA, and funding to boost meat and poultry inspection capacity.
- Education: $376.6 million for school transportation, $50 million for the Empowerment Scholarship Account program, and $33.4 million to ensure minimum teacher pay.
Despite Missouri’s currently strong economy, the Governor’s Office of Budget and Planning projects a general revenue shortfall of nearly $1 billion beginning in FY27 if spending trends continue. Kehoe attributed this to decreased federal pandemic aid, new tax cuts—including the elimination of capital gains tax—and emergency disaster relief costs exceeding $210 million.
Governor Kehoe emphasized that Missouri does not face an economic crisis, but rather a “spending problem,” and pledged to work with lawmakers to protect the state’s financial health while continuing to support essential services.
For more details on vetoes and expenditure restrictions, visit www.governor.mo.gov.
