Budget think tank blames Missouri budget vetoes on income tax cuts

JEFFERSON CITY, Mo. (KY3) – The 2025 fiscal year begins Monday, just days after the governor vetoed many one-time projects.

The overall budget the governor signed is about 50 billion dollars. Governor Mike Parson vetoed just over $1 billion from the 2025 Missouri state budget, blaming most of that on an expansive and controversial education bill.

Parson said that the education bill will cost $400 million more than anticipated. It includes raises for teachers and incentives for schools to stay in session five days a week.

The non-partisan think-tank Missouri Budget Project said the tight budget is likely the fault of last year’s income tax cuts. While the investment into Missourians’ education is important, Amy Blouin said the recent tax cuts are costing the state.

“Because of the tax cuts, we’re facing a significant cliff, and next year, instead of a lot of little projects throughout the state, we’re probably looking at education and healthcare being cut,” Blouin said.

The Missouri legislature slashed the top level of income taxes from 5.3% to 4.95% last year.

“We’ve been living on borrowed time, if you will, because of those savings that were accrued during COVID, but those tax cuts have real consequences,” Blouin said.

St. Louis Democratic Rep. Peter Merideth said he’s not surprised at the budget cuts, mostly because he believes Republican tax cuts are leading to a loss in revenue.

“A billion dollars a year of tax cuts that were just passed, plus more that are about to take effect, that’s why we can’t pay for all of these things,” Meredith said.

House budget chair Republican Rep. Cody Smith declined an interview today. Senate appropriations chair Republican Sen. Lincoln Hough did not respond to inquiries.

Lawmakers will begin crafting the 2026 Missouri budget in January.

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