The Missouri House has passed its $50.3 billion version of the state operating budget for the upcoming fiscal year.
The operating budget is roughly $1.7 billion less than Gov. Mike Kehoe's recommended operating budget.
The budget contains over $4.2 billion for the K-12 public school foundation formula as well as over $360 million for school transportation. However, the budget doesn't fully fund either.
The House version also restores over $80 million in funding for disability care programs that Kehoe's version cut.
It also includes a massive overhaul of higher education funding that critics say hurts the state's smaller colleges and universities.
Lawmakers passed the series of budget bills on Thursday. Several other budget bills must still go through the House.
All the budget bills must still be considered by the Senate, where changes are likely.
In a press conference before the vote, House Budget Chair Dirk Deaton, R-Seneca, called the budget fiscally conservative and said it moves the state in the right direction.
"I think this is a responsible product, and we did have to make some tough decisions, and difficult decisions certainly remain," Deaton said.
Missouri is facing its tightest budget in years due to shrinking revenues. Part of that is because the glut of dollars received from the federal government, like the American Rescue Plan Act, has been allocated or spent.
Rep. Betsy Fogle, D-Springfield, said that there was pain felt in the budget room this year and that pain is only going to get worse the next few fiscal years.
Fogle anticipates budget woes being exacerbated by several factors, including the federal government's One Big Beautiful Bill Act.
"A lot of those dollars we're seeing appropriated in fiscal year 2027, but a lot of the very damaging parts of House Resolution 1, we don't see until future fiscal years," Fogle said.
According to Fogle, that includes the reduction of future federal SNAP and Medicaid funds.
Similar to prior years, education funding made up most of the debate on Thursday.
Rep. Ed Lewis, R-Moberly, said the bill funding K-12 public education was excellent.
"This will keep our public schools funded at record levels where they were last year," Lewis said.
However, Democrats like Rep. Kathy Steinhoff, D-Columbia, said the budget is underfunding the state's K-12 foundation formula.
According to Steinhoff, the state is underfunding the formula by $190 million as well as not fully funding school transportation.
Rep. Aaron Crossley, D-Independence, said that with this funding amount, the state isn't meeting its obligations.
"The foundation formula, in case you weren't aware, is set by statute, and so we are sending a budget out of this room today that breaks the law," Crossley said.
However, Deaton said that formula isn't an iron clad requirement regarding K-12 appropriations.
"It's a formula to suggest what the funding could be, some would say should be, but annually we appropriate and have to make these decisions each and every year," Deaton said.
Another section within the K-12 education bill that Democrats pushed against, was the underfunding of child care subsidies to the tune of $51 million.
"We really need to make sure that these funds get brought back in order to help workforce development," Rep. Emily Weber, D-Kansas City, said. "People can't go to work if they don't have anybody to provide child care for their kiddos."
Democrats especially did not like language within the bill that bars child care facilities from funding based on enrollment instead of on attendance.
Fogle said this restriction goes back on a promise made by Kehoe during his first State of the State address in 2025.
Deaton said one reason he supports funding based on attendance is cost.
"If we continue to pay on attendance as we are right now, we're maintaining the status quo. That's all we're doing. We're able to serve more children. I do think it better enables program integrity as well," Deaton said.
While mostly Democrats spoke against this change, Rep. Brad Pollitt, R-Sedalia, also spoke on the reduction in child care subsidies. He asked colleagues to remember that they made a big cut to child care this year.
"Next year, remember that they've taken a cut, and maybe we can not have to cut them again," Pollitt said.
The education budget bill passed by 85-70. That's only three votes above the necessary 82 to pass.
In a later bill, Democrats also spoke against $60 million toward the Empowerment Scholarship Account program, which allows families to get funding to send their children to the school of their choice, including private schools.
Rep. Stephanie Hein, D-Springfield, warned lawmakers to be cognizant of what this will cost in the future to maintain this program.
"The only way that you can continue to serve (those) who currently have the scholarships and grow a program is to add (general revenue) so as we make future budget decisions," Hein said.
Last year, the budget allocated $50 million toward the program. Treasurer Vivek Malek asked for $100 million earlier this year at the beginning of the budget process.
A new way to fund higher education
The other lion's share of debate was dedicated to a restructuring of higher education funding.
Deaton said while the amount allocated to higher education institutions is the same as last year, it divides that money differently and instead will largely tie funding to enrollment.
"Having the money go more where they go, where the students are receiving the higher education and providing equity to funding across the state and across our public universities and colleges and providing funding distributed equally by full-time student equivalence," Deaton said.
That means larger schools, like the University of Missouri and Missouri State, would be better off than smaller institutions.
Democrats repeatedly spoke against the changes, saying they will devastate some colleges while enriching others.
"This is too drastic for Missouri, too drastic for our schools, too drastic for our employees throughout the state and the world of education, it's too drastic for our communities," Steinhoff said.
Rep. Kem Smith, D-Florissant, spoke about St. Louis Community College, where she has taught. She said the college is looking at a 19.7% cut under the new funding method. That's over $9 million.
"While we were told that this does not change the total amount, this reduction cooks our schools. It does not take into account how it's going to harm the St. Louis region and the state's economy," Smith said.
Deaton said the decision to change how colleges and universities are funded comes after years of no action on this front.
"The only way we're going to get movement on this is if the General Assembly, the policymakers, make policy for higher education, which is what we should do. It's incumbent on us," Deaton said.
Deaton also said there are other ways higher education institutions can receive dollars, including tuition and grants.
The vote to pass the higher education funding bill was another close one. House members voted 83-66 to pass it. That's only one above the needed number of votes to pass legislation in the House.
The bill now goes to the Senate, where it is possible that the funding model reverts to how it was.
A restoration of funding for disability care programs
One section of the budget that was restored by the House was tens of millions of dollars toward disability care programs.
That was a cut initially was in the governor's proposed budget. However, feedback from those who would be negatively affected by the cuts caused a change in course.
Senate Appropriations Chair Rusty Black, R-Chillicothe, released a statement in February that said, "My intention is to work with my colleagues to restore these cuts as the Senate builds its budget."
Deaton offered a similar sentiment.
"That's one, as we heard from people around the state, as I heard from my members on both sides of the aisle, it's just something that we weren't comfortable doing this year," Deaton said.
While Democrats were happy to see that funding restored, some, like Rep. Jo Doll, D-Webster Groves, said those reductions should have never been on the table in the first place.
"We caused months of stress and angst for these families, people who had to load up their children with disabilities and drive here to testify," Doll said.
In addition to both education bills, there was another close vote in the bill funding state government, including statewide elected officials, the judiciary and the General Assembly. That bill passed 84-61.
Fogle said she has not seen close margins on the budget like that in her six years in the House.
"What that signals to me is that there's bipartisan concern for some of the ideas and lack of investments in some areas, and a change in investments in others," Fogle said.
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