Fiscal Issues
The ACT4MO crew was at the Capitol the whole day of the State of State Address. There was speculation that Governor Kehoe would not follow the example of his predecessor and his speech would not be a potpourri of new spending. Unfortunately, that is not what we got from the Governor. At least 18 times, the Governor spoke about increasing spending. Before discussing the necessity or value of the spending proposals, it is time for our state leaders to face some harsh realities.
Some facts left out of the Governor’s State of the State Address
Before considering any new spending, we should examine our state’s current financial situation. As of this morning, our state has over $16 Billion in debt.
In addition, our state budget has nearly doubled since 2017. Does anyone besides the special interest groups feel like the quality of government has also doubled in this time frame?
In the same time frame, the Republican Party has had a Supermajority in both chambers and held every major statewide elected office since 2017.
These are not the results we should expect from a Republican-controlled State! Having just taken office, Governor Kehoe had an excellent opportunity to show that this would change under his administration. Instead, he continued proposing more spending and government growth as his predecessor did. This is very troubling, considering that with the election of President Trump, the amount of Federal money coming into the state is quite likely to drop significantly.
This is important because Federal money has accounted for as much as 40% of the total revenue coming into the state in the last few years. In 2023, Missouri’s state and local government revenues from federal transfers were significant. According to various sources, federal funding contributed a substantial portion to Missouri’s budget:
• The Missouri Budget Project’s FY 2023 Budget Overview indicates that federal aid, particularly from COVID-19 relief packages, played a crucial role in the state’s budget. This included $721 million from the American Rescue Plan Act for child care stabilization and $4.5 billion for education to support the response to and recovery from the effects of the pandemic.
• USAFacts reported that in FY 2021, Missouri received $16.2 billion from federal transfers, which constitutes 18.7% of its government revenues. Although this data is for FY 2021, it gives an indication of the dependency on federal funds, with adjustments likely for 2023 due to additional federal aid.
Given the specifics from the Missouri Budget Project for FY 2023, it’s clear that federal money significantly bolstered Missouri’s budget. However, exact percentages for the total state revenue might vary based on including all federal funds versus strictly general revenue. However, a conservative estimate, based on the available data and considering the substantial federal aid, would suggest that federal funds could account for roughly 30% to 40% of Missouri’s total revenue in 2023, reflecting both the direct federal transfers and the impact of federal stimulus on state budgets.
In 2024, the share of Missouri’s state revenue from federal funds was notably high due to various federal programs and aid. According to the data:
• The Missouri Budget Project’s “Introduction to Missouri’s State Budget (2024)” notes that federal funds make up a larger share of the state budget due to temporary federal funding stemming from COVID relief packages and subsequent federal investments like the Bipartisan Infrastructure Bill. The total operating budget for FY 2024 was $51.85 billion, with federal funds contributing to this increase.
• The Pew Charitable Trusts reported that for fiscal year 2022, federal grants to states topped $1 trillion, with federal funds accounting for 36.4% of states’ revenue. Although this is not specific to Missouri, it provides a broader context. For Missouri specifically, federal funds were expected to remain elevated through fiscal 2024.
DOGE or MOGE
To be fair, the Governor did make the following statement in his address:
“As we are seeing a national movement to reduce the size of government and focus on efficient practices, I hope to see the same in Missouri.
You won’t find this in the budget currently, as it’s a work in progress, but I am working with House and Senate leadership to ensure Missouri has its own version of a DOGE government efficiency initiative very soon—a Show-Me DOGE, if you will…
Our Missouri DOGE will have an immediate return on investment, as we will ask industry experts from around the state to donate their time to assist our state agencies in the areas of their expertise. For every dollar we invest in this, we will ask that they invest the same in their time and efforts.“
So, what would this look like? There’s not much to go on, but that last line resembles what the Show Me Institute has proposed. An article published on their website on January 9th, 2025, outlines a program they call MOGE (Missouri Office of Efficiency.) While the stated goals are very similar to President Trump’s DOGE, there seems to be one critical difference in the implications of the programs. We hear nearly daily of cuts that Elon Musk and his team find, and President Trump is making immediate cuts where he has the authority to do it. Missouri’s version, it seems, would be months away from even being formed, and it is very unclear when or if we would ever see any real cuts from them.
Missouri deserves better, and it should concern the Missouri GOP that the party’s reputation is already taking a hit. If there is a complete budget disaster under the party’s leadership, the party may see its dominance in the state disappear for many years.