Gov. Kehoe signs $50.7 billion Missouri budget, issues $30 million in vetoes

Missouri Gov. Mike Kehoe signed a $50.7 billion state operating and capital improvements budget for fiscal year 2027, approving spending plans that emphasize public safety, education, health care and economic development while vetoing more than $30 million in general revenue appropriations.

The budget includes approximately $49.8 billion in operating expenditures after the governor’s vetoes, including $15.7 billion in general revenue.

Kehoe said the budget reflects a more restrained approach to state spending following several years of significant budget growth.

“I appreciate the members of the General Assembly for their partnership in passing a budget that reflects our shared commitment to fiscal discipline and responsible stewardship of taxpayer dollars,” Kehoe said in a statement.

The spending plan allocates about $24.8 billion for health care programs, $9.8 billion for education, $2 billion for public safety initiatives, $338 million for economic development and $59.4 million for agriculture.

Public safety funding includes support for Missouri Blue Shield grants, Operation Relentless Pursuit and law enforcement academy scholarships. Education funding includes money for the state’s K-12 foundation formula, transportation, career and technical education, higher education and the Empowerment Scholarship Account Program. Economic development investments include funding for workforce development, apprenticeship programs, the Missouri Technology Corporation and Missouri One Start.

Despite signing the budget, Kehoe warned that Missouri faces long-term fiscal challenges. His administration said lawmakers relied on $179.1 million in one-time funding to pay for ongoing expenses and projected the state could face a budget shortfall exceeding $500 million in fiscal year 2028 if spending continues to outpace revenue growth.

“State government doesn’t have a revenue problem, we have a spending problem, and continuing to spend faster than we grow our economy is not a sustainable path forward,” Kehoe said.

To produce a balanced budget as required under the Missouri Constitution, Kehoe issued 65 line-item vetoes totaling more than $30 million in general revenue. He also imposed 78 expenditure restrictions totaling $441.3 million, including $337.2 million in general revenue.

According to the governor’s office, the vetoes and spending restrictions primarily affected new projects, appropriations that relied on what the administration considered improper funding sources and programs with funding levels exceeding anticipated needs.

The fiscal year 2027 budget takes effect today.