Gov. Parson trims $1B, reserves $1.9B before approving Missouri's $50.5B budget

(The Center Square) – Missouri Republican Gov. Mike Parson signed into law Friday the state's $50.5 billion budget for fiscal year 2025, beginning Monday.

Parson made 173 line-item vetoes worth approximately $1 billion and approximately $1.9 billion wasn’t allocated. Missouri will end the 2024 fiscal year on Sunday with a $6 billion fund balance with approximately 66% of those funds obligated toward fiscal year 2025 expenses.

"The use of the veto pen is not something I do eagerly, but today these vetoes represent the elimination of unnecessary pet projects and the protection of the taxpayer dime," Parson said in a statement. "We may be leaving $1.9 billion on the bottom line, but that doesn't mean we spend for the sake of spending. I also remind legislators and the media that a fund balance does not always mean a surplus. We have obligations both this year and in future years that must be accounted for today to avoid future budgetary pains tomorrow."

Four factors led to most of the vetoes, according to a media release from Parson’s office. Senate Bill 727 , an omnibus education bill signed into law during the legislative session, is estimated to cost $400 million when fully implemented. Increases to the K-12 Foundation Formula are expected to cost $300 million over next year’s amount, starting in fiscal year 2026.

Parson vetoed 12 items worth approximately $16 million from the Department of Elementary and Secondary Education’s $8.8 billion budget for 2025. The largest eliminating $10 million from the department’s Federal Emergency Relief 2021 Fund for the Close the Gap Program.

“Given the short-term nature of this funding source, it is not prudent to start a new program cycle, therefore, the funding is limited to existing obligations from the fiscal year 2024 budget,” Parson’s veto letter stated. “Further, expenditures under this program should prioritize tutoring services provided to eligible children and not technology equipment purchases.”

Parson approved $361.4 million to fully fund the school transportation program for the third consecutive year.

Parson vetoed approximately $8.6 million from the Department of Higher Education and Workforce Development’s $1.5 billion budget. However, $367.7 million was approved for the department’s capital improvements.

Parson’s office stated the legislature “grossly over appropriated Budget Stabilization Funds” and spent nearly $300 million more in general revenue than the budget he recommended in January. The state’s general revenue accounts for $14.9 billion of the upcoming fiscal year budget.

"Today, we signed a conservative and balanced budget that focuses on two priorities that we know lift every Missourian up: workforce development and infrastructure," Parson said.

The budget provides $1.5 billion for broadband expansion in rural and underserved areas of the state. It also has $577.5 million to begin expanding a 200-mile stretch of I-44 from St. Louis in eastern Missouri to Joplin near the Kansas border.