Gov. Kehoe outlines budget cuts, tax plan in 2026 State of the State Address
FOX23 News at 9 p.m.
JEFFERSON CITY, Mo., (KBSI) — Governor Mike Kehoe delivered his 2026 State of the State address to the Missouri General Assembly, outlining legislative priorities and a proposed budget for fiscal year 2027 on the one-year anniversary of his swearing-in as Missouri’s 58th governor.
Kehoe said his budget recommendation emphasizes fiscal discipline as state finances normalize following an influx of federal funding in recent years. The proposal aims to align ongoing spending with ongoing revenues and return state finances to a sustainable, pre-pandemic framework.
“Today, we delivered a budget recommendation that focuses on the core functions of government and how we can best serve Missourians without overpromising and overspending,” Kehoe said. “Our recommendation proves that state government can live within its means while our economy continues to grow.”
Since fiscal year 2022, more than 3,400 items have been added to the state’s operating budget, resulting in nearly $13 billion in new general revenue spending, according to the governor’s office. Kehoe’s proposal would reduce more than $600 million from the general revenue core operating budget to begin addressing a projected future imbalance of more than $2 billion.
The governor said the reductions would preserve funding for high-priority obligations, including Medicaid matching requirements, childcare subsidies and disaster relief, while maintaining core funding for higher education and the K-12 foundation formula.
Kehoe also renewed his call to eliminate Missouri’s individual income tax through a phased and voter-approved plan. He urged lawmakers to pass a joint resolution placing the proposal on the ballot this year.
“If we are serious about building a foundation for growth, then we must begin the work now to phase out and eliminate Missouri’s individual income tax,” Kehoe said, adding that safeguards would be included to protect against economic downturns and avoid taxing agriculture, health care or real estate.
In reviewing his administration’s first year, Kehoe highlighted priorities in public safety, economic development, agriculture and education. He also announced four executive orders, including the creation of a statewide school accountability A–F grading system, initiatives to guide the use of artificial intelligence in state government, a government efficiency program known as Missouri GREAT, and the establishment of an Advanced Nuclear Energy Task Force.
A full transcript of the address, budget details and related materials are available through the governor’s office.
