State Auditor Scott Fitzpatrick warns Missouri remains on track for painful, emergency budget cuts

As Missouri Governor Mike Kehoe prepares to take action on the Fiscal Year 2027 state operating budget, State Auditor Scott Fitzpatrick is urging him to take steps to proactively balance the budget now before more painful cuts are needed in the future.

Despite a warning from Fitzpatrick before the 2026 legislative session began, a new report from his office details how the fiscal year (FY) 2027 budget process resulted in an authorized increase, rather than a decrease, to General Revenue Fund (GRF) spending, and is projected to result in deficit spending of over $1.7 billion for the year. The state's General Revenue Fund balance, which stood at a high of approximately $5.8 billion in FY 2023, will be approximately $600 million by the end of FY 2027, and the balance will be completely exhausted early in FY 2028 based on current projections.

"The numbers are right there in black and white, and unfortunately lots of red, and they show a trend of deficit spending that cannot be sustained and that continues to jeopardize our state's financial health," said Auditor Fitzpatrick. "As someone who has served as chairman of the House Budget Committee, I know making spending cuts can be difficult and even painful, but if we can make a responsible, proactive course correction for our budget today these cuts will be far less painful than the ones that will be necessary in the near future. That's why it's disappointing that the situation has gotten worse, rather than better, since we released our first report in December 2025."

He added, "I'm confident Governor Kehoe will take the appropriate actions to get our budget back on track and there is no doubt he is more than justified in using whatever means necessary to bring state spending in line with ongoing revenue. He has a variety of options available - line-item vetoes, withholds, possibly even vetoes of legislation with large fiscal notes - and I urge him to use any combination of these remedies to right the ship and put us on course to protect Missouri's financial health."

The report released by Fitzpatrick in December 2025 documented how the state saw annual revenue increase 45.8 percent from fiscal years (FY) 2020 to FY 2025. However, as the report noted, this period of time also saw state expenditures increase by roughly 53.4 percent, which is more than twice the rate of the Consumer Price Index (CPI) increase over the same time period (24.5 percent). The report projected deficit spending of over $2 billion, $1.5 billion and $1 billion for FY 2026, FY 2027, and FY 2028, respectively. The report also described how the General Revenue Fund balance would be fully depleted in FY 2028 based on the current Consensus Revenue Estimate (CRE) projections.

Today's follow-up report details how the FY 2027 budget process resulted in an authorized increase, rather than a decrease, to General Revenue Fund spending and makes it clear action must be taken quickly to bring expenditures down to the level of ongoing revenue. The report also details how the budget situation could get even worse based on other challenges the state faces, including: Missouri's tax revenue not growing by as much as projected, the supplemental budget request being larger than currently projected, the current budget being balanced with one-time funds that cannot be used again, and the possibility of hundreds of millions of dollars in additional mandatory increases throughout the state budget in FY 2028 and beyond.

Today's follow-up report is available here. The original report released in December 2025 is available here.