Exploring the implications of funding shifts from public to private education in Missouri under Gov. Kehoe’s new budget proposal.
New Missouri Gov. Mike Kehoe proposed a state budget that would shortchange local public school districts by $300 million while providing $50 million in direct taxpayer funding for private school tuition vouchers, a plan that appears to violate a state constitutional prohibition against granting public money to private entities.
Basic state funding for local K-12 schools is distributed in accordance with a complex formula established in state law. The central feature of the formula is the “state adequacy target,” which is the amount of per-pupil funding deemed necessary under the law for students to achieve performance goals.
In his budget plan, Kehoe, a Republican who has been in office less than a month, opted not to fund the adequacy target for the upcoming fiscal year. However, Kehoe is proposing a $200 million increase in formula funding to account for costs enacted last year to bolster funding for public schools as part of a legislative deal to secure passage of an expansion of Missouri’s private school voucher program. But by not funding the adequacy target, the state will still fall $300 million short of hitting the minimum amount of K-12 funding called for under state law.
Because the Missouri Constitution prohibits lawmakers from directly granting public money to private organizations or individuals, the state’s school voucher program currently is exclusively funded by private donations. In exchange for those contributions, however, donors receive tax credits that reduce their state tax liability – and thus the amount of money coming into the state treasury.
Kehoe’s proposal to appropriate $50 million in taxpayer money for the program marks the first time the state has attempted to directly fund tuition for private K-12 schools. If lawmakers approve the funding during the budget process, it will almost certainly face a legal challenge for violating constitutional restrictions.
Overall, Kehoe proposed a $52.77 billion state operating budget for the 2026 fiscal year, which begins July 1. He announced his budget, along with his policy priorities for this year, during his first State of the State address before a joint session of the Missouri General Assembly.
While Kehoe’s plan calls for close to $2 billion more in spending than what lawmakers originally authorized last year for the FY 2025 operating budget, that spending plan underfunded Medicaid and many other programs well below anticipated costs, with many budget observers – including then-Gov. Mike Parson, a Republican – predicting lawmakers would need to pass a supplemental appropriations bill for FY 2025 that could be the largest in state history.
As anticipated, Kehoe asked lawmakers to pass a $2.12 billion supplemental spending bill to make up for underfunded costs in the original FY 2025 operating budget. When factoring in the massive supplemental bill, Kehoe’s FY 2026 budget proposal would keep spending roughly flat over FY 2025 levels. Kehoe also requested another $954.5 million for one-time capital improvement projects in FY 2026.
The day after Kehoe presented his plan, the House of Representatives began hearings to review his spending requests. Lawmakers face a May 9 constitutional deadline for granting final passage to the various appropriations bills that will make up the FY 2026 state budget.
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