Missouri Auditor Warns of Budget Crisis and Revenue Shortfall

Missouri State Auditor Scott Fitzpatrick issued a report warning that the state is exhausting the general revenue fund surpluses used to balance spending. The fund, which peaked at $8.1 billion in 2023 and fell to $5.6 billion by May 31, is projected to be exhausted by early fiscal year 2028. Fitzpatrick reported that expenditures for fiscal year 2027 are expected to exceed revenue by $2 billion, necessitating deep emergency budget cuts since the state cannot borrow to cover shortfalls.

Fitzpatrick urged Governor Mike Kehoe to use vetoes and withholdings to balance the current $50.7 billion budget and implement immediate spending reductions. He cautioned that failing to act would lead to a fiscal collision by 2027. The financial instability occurs as the state prepares for an August ballot vote on Amendment 5, which proposes eliminating the state income tax—accounting for 60% of revenue—and replacing it with sales taxes.

State Representative Betsy Fogle, the ranking Democrat on the House Budget Committee, agreed that the state is in financial danger but attributed the crisis to Republican-led tax policies. She specifically cited a capital gains tax exemption that reduced receipts by over $500 million. Other contributing factors include the depletion of federal COVID-19 Medicaid relief funds. The potential cuts threaten critical services, including $80 million for in-home disability care, prompting advocacy from the Missouri Developmental Disabilities Council.