Missouri’s State of the State: Kehoe Unveils Bold Plan for Income Tax Cuts and Increased Education Funding

JEFFERSON CITY, Mo. – Missouri’s new Governor Mike Kehoe recently shared his ideas for the year in his first State of the State address.

Missouri’s revenue is declining, which is affecting different state departments. Kehoe has issued an executive order to revise the K-12 education funding formula. His proposed budget is $300 million less than what is needed for full K-12 funding.

“Throwing more money at the problem is not the solution,” Kehoe stated. “We’ve already invested over $4 billion in K-12 education, but we still don’t see the results we want.”

House Minority Leader Rep. Ashley Aune criticized Kehoe for his approach. “The new administration is stepping back from its promise to public education by not fully funding K-12 schools,” she said.

This year, the state expects a 0.6% drop in revenue. This decline comes as one-time federal funds that were available during the pandemic are no longer there. The Missouri Budget Project points out that earlier income tax cuts also play a role in the falling revenue.

Currently, income tax contributes to about 59% of the state’s revenue, but Kehoe wants to reduce it even further. “It won’t be easy. It will take time, but I’ve directed the Missouri Department of Revenue to work on a plan to eliminate the individual income tax completely,” he said.

Meanwhile, confusion lingers among state budget planners due to recent federal changes. Many were caught off guard by President Trump’s decision to pull back federal loans and grants. This move has raised concerns about how it will impact the state budget, a topic that Kehoe did not address in his speech.

Aune expressed her worries: “It’s concerning to hear the governor talk about budget priorities without mentioning the potential budget gap created by the federal government’s actions.”

Kehoe’s proposed budget totals around $53.7 billion, which is about $500 million more than last year. He has also left $1.5 billion unspent in his budget plan.