State of the State: 2025 vs 2026
Mike Kehoe (2025) to Mike Kehoe (2026)
Missouri 2025 vs. 2026: Governor Kehoe's Shifting Priorities
Governor Mike Kehoe's second State of the State address in 2026 represents a significant pivot toward fiscal austerity and structural tax reform, a sharp contrast from the ambitious spending proposals that characterized his inaugural 2025 address. While the 2025 speech laid out a sweeping vision with specific dollar amounts for public safety ($10 million Blue Shield Program, $2.5 million sheriff's retirement), childcare ($10 million in grants), education ($200 million Foundation Formula increase, $50 million for ESAs, $30 million for Small School Grants), and career technical education ($15 million for CTE centers), the 2026 address is dominated by the need to reduce more than $600 million from the general revenue core operating budget to address a projected $2 billion future imbalance.
The income tax elimination agenda moved from aspiration to concrete action. In 2025, Kehoe directed the Department of Revenue to develop a plan and asked the legislature to add SB 509-style tax cut triggers. In 2026, he escalated this dramatically, calling on the General Assembly to pass a joint resolution placing the phased elimination of Missouri's individual income tax on the ballot this year, previewing revenue replacement through taxing modern services while explicitly ruling out sales taxes on agriculture, healthcare, or real estate. This represents a shift from study and incremental cuts to a ballot-ready structural overhaul of Missouri's tax code.
The 2026 address also introduced several new institutional initiatives through executive orders that were absent from the 2025 vision. These include a statewide A-F school accountability grade card (Executive Order 26-01), an AI governance framework for state government (Executive Order 26-02), the formalized Missouri GREAT initiative (replacing the loosely referenced "Show-Me DOGE" from 2025), and an Advanced Nuclear Energy Task Force (Executive Order 26-04). The nuclear energy and AI executive orders signal a new forward-looking technology agenda that was entirely absent from the 2025 address.
Notably, many of the granular, emotionally-driven policy proposals from 2025 — featuring named individuals, specific communities, and detailed budget line items for everything from fentanyl wastewater testing in schools to Missouri State Fair livestock barns — appear to have been subsumed by a broader narrative of fiscal discipline and government efficiency. The 2025 speech's extensive focus on crime legislation, fentanyl penalties, immigration enforcement, veterans' homes funding ($10 million), childcare regulatory reform, and alternatives to abortion ($4 million) received no specific mention in the 2026 summary, suggesting either these were accomplished or deprioritized in favor of the budget-cutting and tax reform agenda.
New Priorities in 2026
- +Advanced Nuclear Energy Task Force (Executive Order 26-04) to promote nuclear energy deployment in Missouri, an entirely new policy area not addressed in 2025.
- +AI governance framework (Executive Order 26-02) establishing the administration's commitment to safely and effectively using artificial intelligence in state government operations.
- +Statewide school accountability A-F grade card (Executive Order 26-01), creating a new performance measurement system for schools.
- +Formal Missouri GREAT initiative (Executive Order 26-03) for government efficiency, replacing the vaguely outlined 'Show-Me DOGE' concept from 2025 with an institutionalized program focused on responsibility, efficiency, accountability, and transformation.
- +Major fiscal austerity agenda reducing more than $600 million from the general revenue core operating budget to address a projected $2 billion future spending imbalance, framed as returning to pre-pandemic sustainable spending levels.
- +A concrete ballot measure strategy for income tax elimination, calling on the General Assembly to pass a joint resolution placing the phased elimination on the ballot this year, with previewed revenue replacement through taxing modern services.
Dropped from 2025
- −Specific public safety spending proposals including the $10 million Blue Shield Program for local law enforcement equipment, $2.5 million for sheriff's retirement, and funding for a new crime lab in Cape Girardeau.
- −Comprehensive crime legislation details including increased penalties for violent rioting, fleeing in vehicles, stunt driving, and increased oversight of the St. Louis Metropolitan Police Department.
- −Fentanyl crisis initiatives including $4 million for wastewater testing in schools and legislation to charge fentanyl dealers with first-degree murder.
- −Childcare reform agenda including $10 million in employer-community partnership grants, executive order for regulatory rewrite, and commitment to pay providers at the beginning of the month on enrollment.
- −Detailed K-12 education spending including the $200 million Foundation Formula increase, $50 million for ESAs, $33 million for teacher salaries, $30 million for Small School Grants, and $370 million for school transportation.
- −Career and technical education investments including $15 million for CTE centers, $5 million in annual operational support, and $1 million for career counseling expansion, along with the Governor's Workforce of the Future Challenge.
- −$10 million in additional general revenue funding for Missouri Veterans Homes with the pledge that no veterans home would close due to lack of state funding.
- −Missouri State Fair infrastructure investment including bonding for a 40,000 square foot livestock barn and 80,000 square foot stalling barn.
- −Alternatives to abortion funding of $4 million for expecting and new mothers, representing a 50% increase to existing services.
- −Immigration enforcement coordination with the Trump Administration and border security references.
- −Tort reform legislation and regulatory reduction directives for Cabinet agencies.
- −State employee retention pay plan increases based on years of service.
- −Professional licensing reciprocity for spouses of law enforcement officers.
- −School safety legislation requiring inter-agency meetings and incident reporting to DESE.
- −Voluntary open enrollment in public schools and additional charter school capital improvement funding.
- −$100 million reappropriation for rural road improvements.
- −$800,000 in permanent funding for Missouri FFA.
- −School Funding Modernization Task Force and critique of the Foundation Formula.
Shifted Emphasis
- ↔Income tax elimination moved from a directional goal — tasking the Department of Revenue with developing a plan and requesting SB 509-style triggers — to an aggressive, ballot-ready strategy calling for a joint resolution this year with specific details about revenue replacement through taxing modern services.
- ↔Government efficiency evolved from a loosely described 'Show-Me DOGE' concept with no budget allocation in 2025 to a formalized initiative — Missouri GREAT — established by executive order with defined principles of responsibility, efficiency, accountability, and transformation.
- ↔Education accountability shifted from a 2025 focus on spending increases and a School Funding Modernization Task Force to a 2026 emphasis on performance measurement through an A-F school grade card system, while explicitly protecting core K-12 foundation formula funding from the $600 million in budget cuts.
- ↔The overall fiscal posture shifted dramatically from an expansive spending agenda with numerous new investments totaling hundreds of millions of dollars in 2025 to a disciplined austerity framework in 2026, cutting $600 million and citing $13 billion in new general revenue spending added since FY2022.
- ↔The four policy pillars of public safety, economic development, agriculture, and education were maintained as stated priorities in both years, but the 2026 address frames them within a context of fiscal constraint rather than new investment, with far less specificity on individual programs and dollar amounts.
Policy Topics Addressed
Affordability
Governor Kehoe's central proposal was eliminating Missouri's individual income tax through a phased, voter-approved plan. He called for a ballot measure this year and previewed modernizing the tax code by taxing services not currently taxed while promising safeguards including triggered rate reductions. He emphasized fiscal discipline, reducing over $600 million from the general revenue budget to address a projected $2 billion imbalance.
Economy & Jobs
Governor Kehoe proposed phased elimination of Missouri's individual income tax, calling for a ballot measure to let voters decide. He emphasized fiscal discipline with a budget reducing over $600 million from the general revenue core operating budget and previewed broadening the sales tax base to modern services while protecting agriculture, healthcare, and real estate from new sales taxes.
Education
Governor Kehoe signed Executive Order 26-01 creating a statewide school accountability A-F grade card, signaling a focus on transparency and accountability in K-12 education outcomes. While specific education spending details were limited in the address summary, the Governor emphasized core functions of government and maintaining fiscal discipline without cutting K-12 foundation formula funding.
Government Reform
Governor Kehoe signed Executive Order 26-03 creating 'Missouri GREAT' (Government Responsibility, Efficiency, Accountability, and Transformation initiative), and Executive Order 26-02 committing to safe and effective AI use in state government operations. He proposed eliminating Missouri's individual income tax through a phased plan and emphasized reducing more than $600 million from the general revenue core operating budget.
Healthcare
Governor Kehoe signed an executive order establishing the Advanced Nuclear Energy Task Force but his healthcare focus centered on announcing support for the Rural Health Transformation Program and government efficiency measures including Medicaid reform.
Housing
Governor Kehoe did not make housing a significant focus of his State of the State address.
Infrastructure
Governor Kehoe highlighted infrastructure as essential to economic development, emphasizing the need for business-ready sites and noting $74 million directed toward water and sewer infrastructure projects across the state. He also announced plans to invest $100 million to supplement road and bridge repair work beyond the current road fund.
Public Safety
Governor Kehoe signed Executive Order 26-01 creating a statewide school accountability A-F grade card and Executive Order 26-03 on government efficiency. His public safety focus centered on maintaining fiscal discipline to support essential services, with specific policy details deferred to legislative proposals.
Tax & Budget
Governor Kehoe centered his address on fiscal discipline, proposing to reduce more than $600 million from the general revenue core operating budget to address a projected $2 billion future imbalance. He called for a ballot measure to phase out Missouri's individual income tax entirely, arguing the tax code needs modernization. He emphasized that voter approval would be required first and that new revenue from currently untaxed services would replace income tax revenue, with triggered rate reductions as safeguards.
Technology
Governor Kehoe signed Executive Order 26-02 demonstrating his administration's commitment to safely and effectively using AI in state government operations. He also signed an executive order establishing an Advanced Nuclear Energy Task Force to promote nuclear energy deployment in Missouri, connecting technology and energy policy.