Gov. Mike Kehoe used his State of the State address Tuesday to outline a broad policy agenda focused on spending reductions, tax changes, energy development, public safety and education, setting the stage for legislative debates in the months ahead.
The address covered fiscal policy, economic development, social issues and government operations, with proposals that would require legislative approval and, in some cases, voter action.
Government Efficiency Initiatives
Kehoe announced a series of executive orders aimed at restructuring state government operations. He aligned Missouri’s efforts with President Donald Trump’s federal government efficiency initiatives and said the goal is to streamline agencies and reduce administrative costs.
Under the directives, cabinet officials are required to spend at least eight hours per month meeting with stakeholders. Kehoe also announced the Missouri GREAT initiative, which will place private-sector executives within state agencies to evaluate operations and recommend changes intended to reduce costs and improve efficiency.
Budget Proposal and Spending Outlook
The governor devoted a significant portion of the address to the state budget, stating that current spending trends following the COVID-19 pandemic are not sustainable over the long term.
Kehoe’s proposed budget includes more than $600 million in spending reductions. His administration projects that without changes, Missouri could face a $2 billion imbalance in future budgets. According to the governor, lawmakers have added more than 3,400 budget items totaling nearly $13 billion in new general revenue spending since fiscal year 2022.
The proposal maintains funding for K-12 education, higher education, Medicaid expansion requirements and disaster relief. Kehoe said any changes made by lawmakers should not increase overall spending without identifying new revenue and stated that the final budget must be balanced.
Income Tax Proposal
Kehoe proposed phasing out Missouri’s individual income tax, which would require voter approval of a constitutional amendment. Under the proposal, voters would consider the amendment later this year, with the income tax eliminated over a five-year period if approved.
Legislative leaders have filed a joint resolution to place the measure on the ballot. To replace lost revenue, Kehoe proposed expanding the sales tax base to include digital services such as subscriptions, online advertising and artificial intelligence platforms. He said agriculture, health care and real estate would be excluded from the expanded tax base.
Energy Policy
The governor called for changes to Missouri’s energy policy, including updating the state’s Renewable Energy Standard to include nuclear power. He announced the creation of an Advanced Nuclear Energy Task Force through executive order.
The proposal is intended to address increasing energy demand associated with technology development, manufacturing and data centers.
Technology and Economic Development
Kehoe signed an executive order expanding the use of artificial intelligence in state government operations. He also promoted Missouri as a destination for technology and business investment.
The governor said economic development efforts would continue to rely on the Missouri Works program and encouraged lawmakers to expand incentives for capital investments exceeding $50 million.
Workforce Development
The address included references to workforce training programs, including funding to expand Pawsperity, a Kansas City–based nonprofit pet grooming school. The program provides job training and certification opportunities for participants.
Kehoe said workforce initiatives should focus on direct job placement and measurable employment outcomes.
Public Safety and Law Enforcement
Public safety proposals included continued funding for Operation Relentless Pursuit, the Missouri Blue Shield program and law enforcement scholarship programs.
Kehoe also urged lawmakers to update state laws governing drone use and highlighted preparations for the FIFA World Cup matches scheduled to take place in Kansas City. Those preparations include funding for the Missouri Highway Patrol, National Guard and disaster response agencies.
Juvenile Justice and Sentencing
The governor proposed changes to Missouri’s juvenile justice system, including legislation that would allow prosecutors to request hearings to determine whether certain juvenile cases should be transferred to adult court, while keeping those offenders housed in juvenile facilities.
He also supported sentencing reforms intended to provide greater clarity for victims and the public.
Social Policy and Ballot Measures
Kehoe urged voters to support Amendment 3, which would restore Missouri’s abortion laws in effect prior to recent court rulings and prohibit certain medical procedures for transgender minors.
He also backed legislation allowing pregnant women experiencing abuse to finalize divorces.
Agriculture and Rural Communities
Agriculture and rural investment were also addressed. Kehoe highlighted disaster relief efforts, rural health funding and a federal waiver related to the Supplemental Nutrition Assistance Program that emphasizes locally produced food.
Missouri recently secured $216 million in federal funding for rural health initiatives, and the governor said the state has expanded support for FFA programs.
Education Policy
Education proposals included expanding funding for the MO Scholars program, allowing open enrollment across public school districts and implementing a statewide A–F school grading system through executive order.
Kehoe said the current school funding formula is outdated and indicated that changes could follow after a modernization task force issues its recommendations. He also supported increased oversight of the Missouri State High School Activities Association.
