Republican tax plan set to drain $500 million from Missouri’s budget

A Republican tax law is projected to strip as much as $500 million from Missouri’s budget next year, a loss critics warn could force painful cuts to essential public services across the state.

Missouri state Budget Director Dan Haug told the Missouri Independent that the ongoing revenue loss could reach $360 million annually after 2026. The loss stems from Gov. Mike Kehoe (R) and Republicans in the state legislature passing a bill to repeal Missouri’s state capital gains tax. In addition to the revenue loss, the tax cut overwhelmingly benefits the state’s millionaires, who engage in more real estate and stock transactions than the working and middle classes.  

Since taking office in January, Kehoe has repeatedly claimed that Missouri has a spending problem to justify tax cuts and spending restrictions on state projects. Kehoe is also attempting to eliminate Missouri’s state income tax, which generated $9.17 billion (approximately 68% of the state’s total revenue) according to the state’s last full fiscal year report.

State Rep. Betsy Fogle (D-Greene County) told the Independent that more money is needed to address the funding problems certain programs are already facing — like public schools, disability care and Medicaid — let alone after a $9 billion loss in revenue.

“Very few people in the General Assembly have been at the table when we’ve had to make drastic cuts,” Fogle said. “It’s very important that we do so in a thoughtful way that protects the core vital services of our departments.”