Governor Kehoe announced his budget decisions yesterday. Here are the highlights:
Delivering on his promise of a responsible, conservative approach, Governor Mike Kehoe signed Missouri’s Fiscal Year 2026 (FY26) state operating and capital improvement budget this week, a $50.8 billion plan focused on core priorities and long-term financial health.
But he didn’t sign without taking out the red pen.
Citing looming revenue shortfalls, Kehoe issued 208 line-item vetoes totaling nearly $300 million, and added 32 spending restrictions worth $211 million. In all, more than $2.2 billion in funding was cut or frozen to ensure the state doesn’t outspend its future.
Budget at a Glance
- $50.8B Total Budget
- $15.4B General Revenue
- 208 Vetoes ($300M)
- 32 Restrictions ($211M)
Kehoe’s Priorities: Focused Investments in Key Areas
Despite the cuts, the budget preserves, and in some cases expands, critical funding in areas like public safety, education, rural infrastructure, and agriculture. Kehoe described it as a budget that “supports smart policies advancing our shared vision of a safer, stronger, and more prosperous Missouri.”
- $10 million for the Blue Shield Program (law enforcement equipment and training)
- $7 million for fentanyl wastewater testing in schools
- $2 million for the Missouri sheriffs’ retirement system
- $91 million for rural road improvements
- $10 million to expand childcare access through employer-community partnerships
- $11 million to upgrade career and technical education facilities
- $55 million for Missouri State Fair facility upgrades
- $800,000 for Missouri FFA
- $330,000 to expand meat and poultry inspection
- $376.6 million to fully fund school transportation (includes $15 million in new funding)
- $50 million for Empowerment Scholarship Accounts
- $33.4 million to ensure all teachers meet minimum salary requirements
Why the Cuts?
Missouri may be doing well today, but the road ahead looks tighter. Kehoe pointed to a projected $1 billion general revenue shortfall starting in FY27, driven by:
- The wind-down of pandemic-era federal aid
- New tax cuts, including a capital gains exemption expected to cost $400 million per year
- Emergency disaster spending topping $210 million
- Legislative spending that added $775 million above the Governor’s original recommendation
“We don’t have an economic problem in Missouri,” Kehoe said. “We have a state spending problem.”
Where the Axe Fell: Veto Totals by Department
Kehoe’s largest vetoes were focused on areas where spending exceeded what he viewed as fiscally sustainable. Department-level veto totals include:
- Elementary & Secondary Education (DESE): $30.8 million
- Higher Education & Workforce (DHEWD): $40.3 million
- Transportation (MoDOT): $1.29 billion
- Office of Administration (OA): $584 million
- Agriculture (MDA): $625,000
- Natural Resources (DNR): $77.3 million
- Economic Development (DED): $32.5 million
- Public Safety (DPS): $13.4 million
- Corrections (DOC): $7.6 million
- Mental Health (DMH): $81.3 million
- Health & Senior Services (DHSS): $9.5 million
- Social Services (DSS): $41.4 million
- Local Government Earmarks (LGO): $11.25 million
- Judiciary: $6.9 million
- Public Defender (OPD): $581,000
- Missouri National Guard (MONG): $160,000
- Capital Improvements – OA: $1 million
What’s Next?
Kehoe emphasized that the spending restrictions are not permanent, and not a reflection of project value, but a necessary step to protect Missouri’s long-term financial outlook.
“This isn’t about questioning the value of these projects,” he said. “It’s about protecting Missouri’s financial future.”
He added, “Just as President Trump is reining in federal spending, we are doing the same in Missouri. We’re committed to getting state spending under control so we can continue supporting Missouri’s growth and prosperity.”
A Tight Budget for Tighter Times
Governor Kehoe’s FY26 budget strikes a tough but clear balance: invest in what matters most and cut where Missouri simply can’t afford to stretch.
With a billion-dollar shortfall looming, Kehoe kept his word on fiscal discipline, preserving essential investments in law enforcement, infrastructure, education, and agriculture, while vetoing or freezing more than $2.2 billion in spending.
Jake Kroesen is a Jackson County native and a graduate of the University of Central Missouri. He holds a B.S. in Political Science.
