Missouri state budget

One of the changes made on the Senate side includes removing almost $15 million toward improving the Missouri Capitol. Now the legislation returns to the Missouri House for a vote.

More than 1,000 Missourians traveled to the Capitol to attend Disability Rights Legislative Day. Lawmakers from both chambers have said they will try to restore $80.7 million in cuts proposed by Gov. Mike Kehoe.

Missouri Governor Mike Kehoe has proposed having citizens vote to phase out the state income tax over the next five years. But is that a viable option for the state budget?

The proposed cuts came out of a "core reduction exercise" requested by Gov. Mike Kehoe. Lawmakers from both parties vowed to undo the reductions but warned the governor could still veto any restoration.

Missouri Gov. Mike Kehoe has proposed deep cuts to art funding across the state as part of an austerity initiative emphasizing smaller government and fiscal discipline. Artists and arts advocates say their cultural contributions help drive economic investment.

Missouri arts and humanities leaders say Gov. Mike Kehoe's proposed budget for the arts would hurt programs across the state — including festivals, performances and museums like the Negro League Baseball Museum in Kansas City.

If Missouri lawmakers agree to all of Kehoe’s proposed supplemental spending, that would represent a year-to-year cut of about $600 million. The future revenue picture is also clouded by the governor's efforts to eliminate the state income tax.

In his 2026 State of the State address, Gov. Mike Kehoe said he wants a statewide vote in November on his plan to phase out the state income tax and allow for taxes on things like monthly subscriptions and digital services. Democrats have questioned whether that's possible without wrecking future budgets.

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.

When Missouri lawmakers voted on the bill, the tax cut was estimated to reduce revenue by about $111 million annually. Now the state budget director says the loss could be as much as $500 million the first year and $360 million annual annually.

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.