Missouri State Auditor Nicole Galloway (D) has launched an initiative to try and learn why Missouri is dealing with money problems. Galloway says she wants to identify weaknesses in policymaking and the causes of the state’s budget crisis, which has swelled to an estimated $500 million shortfall for the fiscal year that begins in July.

State Auditor Nicole Galloway (D)

“Let’s start now, so maybe a decade from now we won’t be wondering why we created tax-free country club memberships but couldn’t find the money to send our kids to school on a bus,” says Galloway.

Missouri has a $27 billion state operating budget.

The audits will focus on: the annual review of state use of federal dollars, known as the Statewide Single Audit; the annual review of state revenue, known as the Hancock Amendment Report; Missouri economic rankings compared to other states; an audit of tax credit programs; an audit of sales, corporate, and income tax exemptions and impacts; and an audit of the state’s timeliness of issuing tax returns. The audits will also examine potential future challenges and vulnerabilities.

Galloway cites a bill passed in 2015 by the Missouri legislature that changed the way corporations doing business in multiple states pay taxes between those states.

“It was supposed to cost the state about $15 million per year,” says Galloway. “Less than two years later, it has already cost us more than $200 million. The legislature made a decision based on an estimate that was more than $100 million off. How is that acceptable?”

In addition to revenue, the audits will examine the state’s significant spending obligations, such as the rising cost of healthcare, prescription drugs, and social services.

Galloway says Missouri’s balanced budget requirement might be set up to fail. She says the legislature finishes each session with a budget that appears to balance, but no one is held accountable when the state cannot make ends meet down the road.

“We need an independent review of the fiscal impact of the legislature’s policy choices, and how those decisions are measured dollar for dollar against what’s being pulled out of our communities in school funding dollars or repairs to roads and bridges,” says Galloway.

The audits will be released individually as they are completed throughout the year.