The Missouri legislature passed an estimated $50.7 billion budget on Wednesday, sending the proposal to Gov. Mike Kehoe’s desk. The final product contained major changes from the House’s version of the budget.

Among those changes were decisions to restore some childcare subsidy funding and retain how higher education is funded.

On the other hand, decisions to restore funding for self-directed services for those with disabilities, underfund the foundation formula for public education and provide extra funding for MOScholars, the private school tuition voucher program, were left intact. 

The plan also taps nearly $2.3 billion in the state’s surplus. The budget requires $15.9 billion in general revenue funds. However, the state projects that net general revenue collection will only be $13.7 billion for the coming fiscal year. Drawing on the surplus will nearly drain reserves, which are predicted to end at $2.3 billion for fiscal year 2026.

Here’s a look at the state’s budget.

K-12 education

Figuring out funding for the Department of Elementary and Secondary Education took the longest for lawmakers.

That was in large part because of discussions about continuing to leave the foundation formula for public schools $190 million short of what is needed to fully fund it. 

The conference committee proposal primarily tapped the Blind Pension Fund and Missouri State Capitol Commission building improvement funds, although each was trimmed from what the House and Senate budgets proposed. It also predicted better lottery revenue. 

Democrats pushed Monday night for a combination of Senate and House positions that called for the maximum numbers from both funds and additional appropriation authority from other school-specific funds. Doing so would have left the foundation formula short by roughly $3 million instead of $190 million.

“I know there are some significant concerns with the position of the House, but I personally don’t see a downfall in or downside in giving the authority,” said Rep. Betsy Fogle, a Springfield Democrat who is the ranking minority member on the House Appropriations committee.

”If these funds come in, if we have a better lottery year, why not give the authority to the schools that if that comes in, we can get closer to fully funding the foundation formula?” 

Senate Appropriations Chairman Rusty Black, a Republican from Chillicothe, said he didn’t want to bank on “maybe money” to close the shortfall. He also said that if the money from lottery proceeds did come through, it could be added into supplemental funding bills later in the year. 

Those requests for additional funding were ultimately denied. Sen. Maggie Nurrenbern, a Democrat from Kansas City, said the committee should keep in mind the decision as it continued through the budget. 

“I do think it’s important that we’re really cognizant of the fact that this is the first time that we haven’t fully funded the foundation formula in a very long time,” Nurrenbern said. “And when we look throughout all of the operating budgets, there’s a lot of superfluous stuff in there. And to me, there’s nothing more important than shoring up the funding for our public schools.”

House Appropriations Chairman Dirk Deaton, a Republican from Seneca, added during the bill’s final debate on the House floor Wednesday that the state would also use any American Rescue Plan Act dollars it gets back from local governments for the foundation formula.

Higher education

In higher education, both four-year and two-year colleges and universities will receive the same allocations they did in fiscal year 2026. 

The move is a reversal from the House’s initial plan. Under that version, it would have maintained funding for higher education institutions at the same level but put all of the funds into one pot to be distributed based on full-time enrollment. That decision would have led to a 53% reduction in state funding for some schools such as Truman State University. 

The conference version also included additional language requiring the Missouri Department of Higher Education and Workforce Development to create a formula-driven model for future funding distributions by December 2026.

Deaton called it an important addition that was long overdue during a press conference on Wednesday.

“I believe it’s already well past time that something changes there,” Deaton said. “In that regard, we would like to see a little more progress this year. But what is occurring is unsustainable. It will change. There’s no question about that.”

Childcare

The conference committee restored the full $51.5 million in childcare subsidies that the House plan had reduced. The money provides for “rate enhancements” for childcare providers who are pursuing accreditation or serving low-income children and children with disabilities. 

Language was added to create a hybrid of attendance and enrollment-based models. Reimbursements would be distributed at the same time they are now, but would be based on enrollment with the stipulation that children cannot miss more than their allotted number of absences.

Kehoe requested an overhaul of the childcare system during his State of the State address. He called for an enrollment-based system that made payments at the beginning of the month. 

Black said while the changes are not exactly what was requested, they do get the state closer to the full enrollment-based model Kehoe has pushed for. 

MOScholars

An additional $10 million for the MOScholars program was restored in the conference committee after the Senate opted not to add that funding. 

Democrats from both chambers requested a return to the Senate position and raised concerns about using taxpayer dollars for private education while the foundation formula remains underfunded.

“My concern continues to be, number one, these schools do not have the pleasure and privilege of educating all children,” Fogle said. “Last year, we at least walked out of this budget room with our public schools fully funded with a statutory promise we’ve made to kids in classrooms across the state. … We’re not doing that this year.”

Democratic lawmakers also sought more transparency and oversight of the program, pointing to the revelation that the state treasurer’s office, which oversees the program, had unknowingly publicly posted students’ names, parents’ email addresses, scholarship funding amounts and what schools students attended. 

“We’ve seen time and time again in the treasurer’s office — I don’t put this word around lightly — but there’s a lot of incompetency there,” Sen. Doug Beck, a Democrat from St. Louis County, said. “It’s troublesome that we’re going to get even more money into that department, and the transparency is not there.”

What’s next?

Kehoe now has until the end of June to veto line items in the budget and then sign it. Some items might face a tougher path to passage than others. 

Throughout the budget, funds intended to improve accessibility to the state Capitol building were diverted to shore up other sections. The foundation formula was one such area, receiving about $73 million. 

Kehoe has previously said he is not comfortable with using the Capitol Commission fund but did not completely dismiss the move. 

Black assured members there was a strong possibility the conference committee’s plan to use Capitol Commission funds throughout the budget would be supported. 

With the budget process done for the coming fiscal year but key legislation like the income tax elimination awaiting voter approval, lawmakers repeated their warning for future lawmakers — prepare for more budgetary strain.

“I have been very public and use my platform every opportunity I have to point out the fact that while we felt pain this year in the budget room, subsequent general assemblies are going to feel even more,” Fogle said during a press conference after the budget’s passage. 

“People in these seats in years to come are going to have very difficult decisions ahead of them, and I hope we continue to stop injecting self-inflicted wounds, which I think some of these things are.”