State auditor urges Kehoe to balance budget as Missouri continues to cut into reserves
JEFFERSON CITY, Mo. (KMIZ)
State Auditor Scott Fitzpatrick on Wednesday urged Gov. Mike Kehoe to balance the budget, saying current spending is jeopardizing Missouri's fiscal health.
Fitzpatrick stated in a news release that the fiscal 2027 budget increased spending from the state's general revenue fund. The state is expected to spend over $1.7 billion for the year. At this rate, Fitzpatrick expects the fund to shrink from around $5.8 billion in fiscal 2023 to around $600 million by the end of fiscal 2027, with the fund being fully depleted by early fiscal 2028.
"Missouri's budget is broken," Fitzpatrick wrote in his report. "Expenditures are projected to be nearly $2 billion more than revenues for FY 2026 and instead of reducing appropriated amounts to correct this, appropriations increased."
"The numbers are right there in black and white, and unfortunately lots of red, and they show a trend of deficit spending that cannot be sustained and that continues to jeopardize our state's financial health," Fitzpatrick wrote.
Kehoe is reviewing the budget approved by the state legislature last month. Missouri's governor enjoys line-item veto power over the budget.
Fitzpatrick's report includes warnings for the state if Missouri's tax revenue fails to perform. He also warns of increased costs to balance the budget.
"In FY 2028 and beyond, there will likely be hundreds of millions of dollars in additional 'mandatory' increases throughout the state budget," according to the report. "Examples of mandatory increases include Medicaid utilization, funding for children with disabilities, and utility cost increases for state government."
The budget approved by the Missouri General Assembly includes $4.3 billion set aside for the state's Foundation Formula that funds public schools, falling short of what the Missouri Department of Elementary and Secondary Education requested by around $190 million.
The Department of Mental Health gets about $1.7 billion in general revenue in the legislature's budget. The Department of Health and Senior Services is also getting about $614 million from general revenue.
Before the budget discussion, Kehoe's proposed budget included about $600 million in cuts to the core operating budget, reducing total spending from $55.1 billion in fiscal year 2026 to $54.5 billion in fiscal year 2027.
The warnings come as Missouri's Republican majority is pushing to phase out the income tax, making up the gap with increased taxes on goods and services. The question will appear on the August primary ballot.
Fitzpatrick warned in December that changes to the budget were needed or else the state's budget would run dry in the next few years.
