Amendment 5 Could Cost King City $500,000

The Missouri Budget Project published an estimate showing that the King City School District stands to lose $500,493 in annual funding should Amendment 5 pass. This is in addition to funding that could be lost if Hold Harmless is done away with. This represents around 7% of King City’s annual budget for the year. Amendment 5 would abolish the State Income Tax and authorize the Legislature to raise sales taxes to offset the losses. The Legislature has not stated how, or if, they would replace these lost revenues.

 

Opinion -- Eliminating Income Tax Could Cause Massive Cuts in School Funding

By the Missouri Budget Project

Lawmakers are considering swapping out the income tax for a greatly expanded sales tax. The proposal would blow a $5 billion hole in the state budget, causing massive cuts to schools, particularly in rural areas.

If resulting cuts are equally distributed across the budget, state general revenue funding for local schools would be cut by more than one-third, or $1.4 billion statewide. As illustrated in a new report from Missouri Budget Project, a nonprofit public policy analysis organization that analyzes state budget, tax, and economic issues, this could result in a nearly 18% cut in TOTAL school revenue including local funds, depending on the school district.

“Missouri already shortchanges our schools, providing a smaller portion of funding for our classrooms than any other state in the nation,” said Amy Blouin, President and CEO of Missouri Budget Project. “This kind of cut would be devastating to students across our state.”

Across all of Missouri’s local school districts, on average that is a cut of over $1,800 per student and is the equivalent of the average salary of nearly 27,000 teachers or over 46,000 support staff, like bus drivers, cafeteria workers, custodians, paraeducators, and office staff.

“Potential cuts would be harmful not only to students, but to communities across Missouri. Rural school districts would be particularly hard hit, and schools are the economic drivers of many of our communities,” Blouin continued. “These types of cuts could lead to district consolidation and job cuts, damaging local economies.”

 

Governor Signs House Bill 594 — Shall Missouri Exempt Capital Gains from the State Income Tax?

PRO

Governor Signs Eight Pro-Growth Bills

by Governor Mike Kehoe’s Office

During a bill signing ceremony at the Missouri State Capitol, on Thursday, Governor Mike Kehoe signed two major pieces of legislation—House Bills (HB) 567 and 594—delivering on his commitment to lower taxes and defend small businesses. 

"Conservative leadership is about keeping more money in the hands of Missouri families, and less in government coffers," said Governor Kehoe. "Today, we are protecting the people who make Missouri work—families, job creators, and small business owners—by cutting taxes, rolling back overreach, and eliminating costly mandates." 

HB 567, sponsored by Representative Sherri Gallick and Senator Mike Bernskoetter, modifies provisions relating to employee compensation.

—Maintains the state's minimum wage law at $15 per hour, repealing the annual Consumer Price Index adjustment, and extends the wage requirement to public employers as well as private. 

—Repeals onerous paid sick leave mandates on Missouri small businesses, including:

—Requirements dictating when and how paid leave must be provided.

—Burdensome record keeping and compliance obligations.

HB 594, sponsored by Representative Chad Perkins and Senator Curtis Trent, introduces or modifies provisions relating to taxation. 

—Authorizes an income tax deduction for all capital gains reported for federal tax purposes by individuals in tax years beginning on or after Jan. 1, 2025. 

—This tax cut will be extended to corporations once Missouri’s income tax rate falls to 4.5 percent or lower.

—Makes several modifications to the Senior Citizens Property Tax (PTC) "Circuit Breaker" Program.

—Increases the PTC for eligible taxpayers from $1,000 to $1,550 for homeowners and from $750 to $1,055 for renters, effective Jan. 1, 2026, with annual CPI adjustments moving forward. 

—Exempts diapers, incontinence products, and feminine hygiene products from state and local sales and use taxes. 

Governor Kehoe also signed six additional pro-growth bills aimed at securing a brighter future for Missouri, including:

—HB 516, sponsored by Representative Mark Matthiesen and Senator Nick Schroer, modifies criteria of radioactive waste investigations and allows for increased appropriations to the radioactive waste investigations fund.

—HB 754, sponsored by Representative Philip Oehlerking and Senator Sandy Crawford, modifies standards for certain financial organizations.

—SB 2, sponsored by Senator Sandy Crawford and Representative Peggy McGaugh, modifies provisions relating to financial statements of certain local governments.

—SB 3, sponsored by Senator Sandy Crawford and Representative Dave Hinman, modifies or enacts provisions relating to Department of Revenue fee offices.

—SB 98, sponsored by Senator Sandy Crawford and Representative Bill Owen, modifies various provisions relating to financial institutions. 

—SB 221, sponsored by Senator Nick Schroer and Representative Ben Keathley, modifies the standard of review for agency interpretation of statutes, rules, regulations, and subregulatory documents.

CON

House Bill 594 is Shameful Giveaway

By the Missouri Budget Project

Statement from Missouri Budget Project CEO Amy Blouin

Governor Kehoe is expected to sign House Bill 594 Thursday afternoon, a tax bill that will reduce state revenue by at least half a billion dollars annually. This comes at a time when our state is already facing significant budget pressures, as well as significant cuts to federal funding in the coming years. 

House Bill 594 will exempt capital gains from state income tax. Like the vast majority of states, Missouri has taxed capital gains – the profits/earnings on the sale of stocks, cryptocurrencies, real estate and other valuables – through the individual income tax structure, just like other income.

The new exemption would send hundreds of millions to Missouri’s wealthiest. 80 percent of this tax giveaway goes to the top 5 percent of Missouri taxpayers, with more than two-thirds going to the top one percent – or those with incomes averaging $1.9 million a year.

State legislators will already be facing budget shortalls in the coming years because of previously approved tax cuts that are being implemented. As announced by Governor Kehoe on June 30th, the state already faces at least a $1 billion shortfall in Fiscal Year 2027, which begins just one year from now.

Moreover, the Federal Budget Reconciliation that was passed by Congress last week will result in a disastrous blow to Missouri. Cuts at the federal level will shift more than $2 billion in health and nutrition costs to the state of Missouri per year. That means devasting budget cuts for years to come and could lead to an economic crisis.

Prioritizing an expensive special interest tax giveaway at this time is irresponsible and a mismanagement of taxpayer dollars. It’s also a slap in the face to the bulk of Missouri taxpayers who are struggling to afford groceries and who already pay a higher portion of their income in state and local taxes than do the folks who will get a windfall from the capital gains exemption.

Although we remain deeply concerned about the underlying bill, some additions made in the Senate will provide much needed assistance to older adults and Missourians with disabilities who have fixed incomes. Specifically, the bill includes updates to the Missouri property tax credit, also known as the circuit breaker tax credit.

The credit helps to offset the cost of property tax for older adults and Missourians with disabilities who have fixed incomes. However, neither income eligibility nor the amount of the credit have been updated in 17 years. As a result, fewer Missourians who need it can qualify. Those that do often receive a very small credit.

The improvements to this credit will help Missourians stay in their homes and communities. The circuit breaker improvements will help nearly 195,000 households and demonstrate the type of tax policy improvements the state legislature should prioritize.

 

Opinion -- The “Big Beautiful Bill’s” Impact on Missouri Healthcare

By the Missouri Budget Project

A new fact sheet from Families USA details how the pending budget bill, set to be voted on by the Senate in the next week or so, will harm Missouri’s health system, including cutting off coverage for at least 210,000 Missourians, making it harder for people to get and maintain coverage, and taking away crucial patient protections for children. The bill also drives up costs for those buying insurance through the Marketplace, skyrocketing premiums and increasing out-of-pocket costs while taking away crucial premium tax credits.

“The cuts to Medicaid and the ACA will have devastating and dramatic impacts on health coverage, care, and costs for American families, and in many ways especially in Missouri. The cuts will not just mean that tens of thousands of Missouri residents lose coverage, but federal cuts will force state budgets into crisis, forcing states to drastically scale back services, leading to closures of rural hospitals and community clinics,” said Anthony Wright, executive director of Families USA. “Senator Hawley must side with patients and health providers and plans to oppose this bill that harms access and affordability of health care for so many Missouri working families.”

“The Senate budget bill as proposed is a direct threat to Missouri's families, communities, and long-term economic future. It fails the test of sound policy and abandons the values of fairness and opportunity that should define our state's priorities,” said Amy Blouin, President & CEO of the Missouri Budget Project. "We urge Senator Hawley to reject this harmful bill and instead champion a budget that reflects the real needs of Missourians — one that invests in our health care. Missouri deserves better.”

The proposed cuts are in opposition with the voters when 82% of adults nationwide — including 67% of Republicans want Congress to maintain or increase Medicaid spending.

The Medicaid program, MO HealthNet, covers 1,268,000 children and adults, including:

—1 in 5 Missouri residents.

—573,000 children — 42% of all children in Missouri.

—237,000 seniors and people with disabilities.

Marketplace coverage, available for individuals and families who do not qualify for MO HealthNet but also do not have employer sponsored coverage, serves:

—417,000 Missouri residents.

—28,000 small business owners in Missouri and over 47,000 self-employed Missouri residents.

—About 95% of enrollees in the state who received an advanced premium tax credit to help them pay their premium.

Families USA, the longtime health consumer advocate, is organizing with Missouri Budget Project and other groups in Missouri and across the nation to protect against cuts care cuts that would force Americans to face increased costs and the loss of health coverage. The Families USA website has a plethora of materials on how its partners are working to defend Medicaid, and has facts sheets on the overall importance of Medicaid to people, the economy and the health care system, how work reporting requirements would undermine access to Medicaid, and how cuts harm families and communities.

Families USA, a leading national voice for health care consumers, is dedicated to the achievement of high quality, affordable health care and improved health for all.

The Missouri Budget Project is a nonprofit public policy analysis organization that analyzes state budget, tax, and economic issues.

 

Pro and Con — Missouri Tax Cut Bill of 2025

Pro — Missouri House

On Wednesday, House Republicans celebrate the passage of House Bill 594 and 508, landmark legislation that supports Missouri families and communities and makes the Show-Me State more competitive for businesses and entrepreneurs.

“We are proud to cut taxes for everyday Missourians and give our local communities the resources they need to thrive,” Speaker Jon Patterson, R-Lee’s Summit, said. “Cutting taxes on diapers and feminine hygiene products affects ALL Missouri families and will have the greatest positive impact with low-income women and girls across Missouri. House Bill 594 is family first legislation.”

“There is something in this for everyone,” Speaker Pro Tem Chad Perkins, R-Bowling Green, said. “I couldn’t imagine anyone not supporting this.”

House Bills 594 and 508 work for Missouri families and communities by:

—Removing state sales tax on diapers and feminine hygiene products;

—Eliminating capital gains tax from the sale of Missourians’ homes, farms, retirement funds, stocks, and other major capital investments;

—Expanding existing property tax relief programs for seniors and tying new thresholds to the Consumer Price Index (CPI);

—Investing in public safety across several local law enforcement organizations;

—Supporting local fire, ambulance, and first responder groups across the state;

—Advancing Missouri’s final-mile broadband expansion efforts and removing sales tax charges on broadband equipment;

—Assisting a local community center in Independence;

With passage and formal signing from the Missouri General Assembly, House Bills 594 and 508 now head to the governor’s desk for his signature into law.

Con — Missouri Budget Project

With Wednesday’s vote in the Missouri House, the state legislature has forwarded to Governor Kehoe a tax bill that will reduce state revenue by at least half a billion dollars annually. This comes at a time when our state is already facing significant budget pressures, as well as uncertainty regarding federal funding in the coming years. 

House Bill 594 will exempt capital gains from state income tax. Like the vast majority of states, Missouri taxes capital gains - the profits/earnings on the sale of stocks, cryptocurrencies, real estate and other valuables - through the individual income tax structure, just like other income.

The new exemption would send hundreds of millions to Missouri’s wealthiest. 80 percent of this tax giveaway goes to the top 5 percent of Missouri taxpayers, with more than two-thirds going to the top one percent – or those with incomes averaging $1.9 billion a year.

The House made clear its priorities when it decided to advance to the Governor this giveaway for an elite few, even when it chose not to fully fund K-12 education in its version of next year’s state budget.

State legislators will already be facing budget shortalls in the coming years because of previously approved tax cuts that are being implemented.

Moreover, discussions underway in Congress could result in a disastrous blow to Missouri. Cuts at the federal level could shift more than $2 billion in health and nutrition costs to the state of Missouri. That would mean devasting budget cuts for years to come and would lead to an economic crisis.

The legislature’s choice to prioritize a special interest tax giveaway is irresponsible and a mismanagement of taxpayer dollars. It’s also a slap in the face to the bulk of Missouri taxpayers who are struggling to afford groceries and who already pay a higher portion of their income in state and local taxes than do the folks who will get a windfall from the capital gains exemption.

Although we remain deeply concerned about the underlying bill, some additions made in the Senate will provide much needed assistance to older adults and Missourians with disabilities who have fixed incomes. Specifically, the bill includes updates to the Missouri property tax credit, also known as the circuit breaker tax credit.

The credit helps to offset the cost of property tax for older adults and Missourians with disabilities who have fixed incomes. However, neither income eligibility nor the amount of the credit have been updated in 17 years. As a result, fewer Missourians who need it can qualify. Those that do often receive a very small credit.

The improvements to this credit will help Missourians stay in their homes and communities. The circuit breaker improvements will help nearly 195,000 households and demonstrate the type of tax policy improvements the state legislature should prioritize.

 

 

Opinion -- Massive Budget Cuts Threaten Healthcare, Food Security

By the Missouri Budget Project

Thursday’s passage of the federal budget resolution in the U.S. House paves the way for Congress to rush through massive federal changes that would result in Missourians losing health insurance, food assistance, and other support. These plans would essentially offload massive federal responsibilities onto our state, forcing harmful tradeoffs and deep service cuts.

If enacted, the proposals would slash federal support for health care, food assistance, education, and other priorities—while offering trillions of dollars in tax cuts to the wealthy. About half of the cost of extending the 2017 tax changes goes to tax cuts for the top five percent of earners.

While Missouri families would pay the price of the cuts – with parents forced to skip meals so their kids can eat, people unable to afford life-saving prescriptions, and students packed into overcrowded classrooms – Missouri legislators would be left holding the bag, expected to plug massive funding holes with strained budgets and limited revenue tools.

“Regardless of the smoke and mirrors, these are cuts. Cuts that will make it harder for Missourians to afford health care and feed their kids, and cuts that could make it harder for Missouri to keep rural schools open,” said Amy Blouin, President and CEO of Missouri Budget Project, a nonprofit public policy analysis organization that analyzes state budget, tax, and economic issues. “The federal government is passing the buck, and state lawmakers will face dire choices.”

Under Congressional proposals at play, Missouri could lose upwards of $2 billion in federal funding each year:

●      Medicaid: Missouri could lose up to $2 billion in federal funding under proposals being discussed in Congress.

●      Supplemental Nutrition Assistance Program (SNAP): If Missouri were required to pay just 10% of SNAP benefits, we would face an additional $150 million cost.

●      Education and Public Services: Deep cuts to federal education funds, housing supports, and child care would force Missouri to either backfill federal dollars or cut essential local services.

Missouri lawmakers would still be required to enact a balanced state budget, despite huge federal funding losses. Doing so would require massive budget cuts, likely some combination of cuts to health coverage – with impacts concentrated among low-income people and families, older adults, and people with disabilities who otherwise would not be able to afford health care, education, and other services.

“These proposals would devastate state budgets and families alike,” said Blouin. “Our state is already facing growing budget challenges, and these cuts would hit a time of deep economic uncertainty.”

In the coming weeks, Congress will begin fleshing out its proposals.

“Our Congressional delegation has a choice. They can reject tax cuts for millionaires and billionaires and invest in Missouri families, healthy communities, and a federal-state partnership that works for all of us.”

The Missouri Budget Project is a nonprofit public policy analysis organization that analyzes state budget, tax, and economic issues.