Gov. Mike Kehoe said he is building “A Foundation For Growth” in Missouri. During his State of the State Address on Tuesday, he told the state legislature he’s energized by the work still ahead.
“Because today isn’t just about reflecting on where we’ve been over the last year—it’s about recommitting ourselves to where we’re going,” he told lawmakers.
Kehoe highlighted his four policy priority areas of public safety, economic development, agriculture, and education.
Missouri’s 58th governor said his law enforcement recruitment and retention efforts are already paying off.
“In 2025, we had more than 1200 peace officer licenses issued, the highest number in one year since 2012. That’s 1200 more law enforcement officers protecting our communities, our families, and our way of life. That’s what this is all about,” said Kehoe.
He said his Blue Shield program has allowed more than 200 Missouri communities to receive grants of $50,000 for law enforcement training and equipment.
Missouri House of Representatives (Photo by Tim Bommel, House Communications)
Kehoe asked the Missouri Legislature to keep backing his crimefighting efforts.
“A piece of this included coordinating regional efforts to arrest dangerous fugitives through Operation Relentless Pursuit, which has now led to the arrest of over 1,100 criminals across our state,” the governor said.
His budget proposal includes $5 million for the Public Safety Recruitment and Retention Act. He said the program had more than 700 applications for the 2026 – 2027 school year.
Kehoe said he also wants to expand school choice in Missouri.
“We’re including $7.5 million in our budget to make open enrollment a reality as soon as possible. Open enrollment is not about weakening public education, it’s about strengthening it. Because when families have choices, schools are pushed to innovate, improve, and respond to the needs of the students they serve,” said Kehoe.
The governor urged the General Assembly to be disciplined with taxpayer money, not wishful spending.
From left: House Speaker Jonathan Patterson, Gov. Mike Kehoe, Lt. Gov. David Wassinger (Photo by Tim Bommel, House Communications)
“Simply put, the days of excusing budgetary decisions with fund balances and so called “surpluses” are over. Over the past few months, my staff and I, along with our budget experts, have worked through the state operating budget to identify programs that no longer best serve our state, or that we cannot afford in today’s budget climate,” he said.
Kehoe rolled out his anticipated plan to gradually eliminate Missouri’s income tax. His blueprint would get rid of the tax within five years.
“Missouri’s tax code was built for the past 100 years. Our economy demands one for the next 100 years,” he said.
The governor called on the legislature to pass a proposed ballot measure to ask voters to get rid of the income tax.
“Missourians can spend their money and generate economic growth a whole lot better than government. And as someone who raises horses and cattle, believe me, if you keep putting hay and grain in front of them, they’ll eat and so will government,” said Kehoe.
Missouri House of Representatives Sign (Photo by Tim Bommel, House Communications)
Kehoe, a Republican, said voter approval would allow legislators to take action on his plan next legislative session.
“Over the past decade, our economic growth has been average at best. That’s not a trend we should accept, and it is one we cannot afford to continue. The issue at hand here is competitiveness. And competitiveness starts with our tax code,” the governor said.
Kehoe wants to tax monthly subscriptions and digital services, like video streaming services, e-books and AI platforms, with profits going to local governments. He suggested the locals then could offset the revenue by reducing local taxes, such as property taxes.
Kehoe said his tax cut plan puts safeguards in place to protect against economic downturns, and require triggered reductions to the income tax rate.
What are critics saying about his tax plan?
Amy Blouin, President & CEO of the progressive group called Missouri Budget Project, said the governor offered few details of how his plan would work.
“But quite simply, eliminating the income tax rigs the system for the wealthy, while hurting working people, families, and communities,” said Blouin. Most Missourians pay the majority of their state and local taxes in sales & property taxes – not income taxes. If new sales taxes are charged on services, overall taxes will likely increase for most Missourians.
She had a suggestion for Kehoe and Republicans.
“If policymakers want to make Missouri more competitive, they should invest in the services Missourians need – and businesses look for in location decisions – like workforce readiness, education, and infrastructure,” said Blouin.
The Missouri Democratic Party’s chair, Russ Carnahan, was not impressed with Kehoe’s tax cut proposal.
Let’s be very clear, an elimination of the state income tax is an attack on Missouri’s working families, seniors, and the most vulnerable of our neighbors,” said Carnahan. “The Republican Party has held control of this state for decades now, overseeing an aggressive decline in quality of life for Missouri residents built on their backs. We need affordability, not policies that shift tax burdens to the hardest working people in our state. No new taxes should be shifted to working Missourians.”
Kehoe presented lawmakers with his $54.5 billion state operating budget for fiscal year 2027. It’s more than $600 million lower than his budget proposal for the current fiscal year.
Highlights of the spending plan include $4.28 billion for state aid to K-12 public schools – virtually the same as the current budget year. It would designate $361.3 million for school transportation costs – about $15 million fewer dollars compared to the current fiscal year.
Other highlights of Kehoe’s proposed budget:
•$830 million for open-ended basis to provide disaster aid
•$166 million for the Public Safety Recruitment and Retention Program
•$71.5 million for FIFA World Cup efforts
•$68.5 million for teacher recruitment and retention efforts
•$60 million for the MO Scholars tax credit program for donations to send students to private K-12 schools
•$52 million for career ladder program to help teachers earn extra money for work
•$40.8 million for 988 crisis hotline, mobile response services, behavioral health crisis centers
•$37.9 million for refugee resettlement
•$17.7 million to provide job training services
•$10.3 million for costs to expand hearing aid services to eligible Medicaid participants
•$7.5 million for open enrollment
•$5.1 million for the Public Safety Recruitment and Retention Program
•$3 million for the Children’s Health Insurance Immunization Program
•$2 million to Convoy of Hope, a religious-based humanitarian organization
•$1.2 million for youth after school and summer programs
•$1.47 million for Public Defender System holistic services
•$681,000 for Attorney General Office’s expansion of sexual assault kit initiative
•$500,000 for community behavioral health liaisons
•$400,000 for the Attorney General’s Office to prosecute violent crimes
•$250,000 for an elementary ag literacy program
•$180,000 to include two additional staff to the Missouri Charter Public School Commission
Funding for Missouri’s community colleges unchanged from current year’s designation
His proposed budget reductions include:
•$108.5 million for certified community behavioral health organizations
•$23.4 million for DHSS Medicaid Home and Community-Based Services
•$10.6 million for Temporary Assistance For Need Families (TANF)
•$9.64 million for Transportation Cost Share Program
•$7.6 million for A+ Schools Scholarship Program
•$5.5 million for Federally Qualified Health Centers
•$5 million for literacy development program
•$4 million for Imagination Library pre-K literacy program
•$3.42 million for human trafficking prevention efforts
•$2.6 million for Missouri’s veterans homes
•$1.75 million for statewide pretrial program
•$1.5 million for Access Missouri Financial Aid Program
•$1.23 million for assistance to victims of sexual assault and emergency shelter grants
•$1 million for Task Force 1
•$1 million for Springfield Autism Center
•$575,000 for Truman State University
•$500,000 for Harris Stowe State University
•$500,000 for University of Missouri
•$500,000 for Urban Policing Program
•$500,000 for adult high school childcare
•$400,000 for Fast Track Workforce Incentive Grant Program
•$250,000 for immigration enforcement training
•$250,000 for treatment courts
Now the Missouri Legislature will dive into his spending plan and make their changes.
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