Truth in Accounting (TIA) is out with its 2026 rating of state finances, and Missouri once again has earned a B grade from the Chicago-based non-profit. Last year I was cautious about the rating. This year, Missouri earned its third consecutive B and increased its Taxpayer Surplus™ from $200 to $500 per taxpayer.
The surplus represents the amount by which available assets exceed obligations under TIA’s methodology, including unfunded pensions and retiree healthcare, divided by the estimated number of taxpayers. The authors wrote, “Missouri maintained a positive financial condition, supported by higher tax revenues and lower liabilities, with only a modest reduction in pension liability.” This is good and represents a substantial improvement over time, though progress has been uneven. Missouri went from a $4,400 per-taxpayer shortfall in fiscal year (FY) 2020 to a $700 shortfall in FY 2022, followed by surpluses of $600 in FY 2023, $200 in FY 2024, and $500 in FY 2025.
There are still some caveats, some of which I discussed last year in a post on this topic. For example, federal grants accounted for 47% of Missouri’s 2025 revenue, or approximately $23.4 billion, second only to Louisiana’s 50%. That leaves Missouri particularly exposed to changes in federal funding. (The audit of that federal funding identified 16 findings that did not align with established standards, laws, or internal policies. Nine of those were repeated from previous audits.) Also, Missouri’s unfunded pension liabilities declined by only 4% despite strong investment returns. TIA attributes that modest improvement to higher-than-expected salaries and retiree cost-of-living adjustments, which offset gains.
Lastly, Missouri is slow to file its financial reports. TIA reports that Missouri released its financial report 235 days after the fiscal year ended—55 days beyond the six-month standard set by the Government Finance Officers Association. Missouri was hardly alone. Four states took more than 300 days after the fiscal year ended to release their reports, and four others still had not released them by TIA’s September 1 research cutoff.
Our positive financial standing is good news not just for us, but nationally. TIA’s numbers indicate 35 of the 46 rated states likewise improved. However, it’s important to recognize that TIA’s assessment of Missouri’s financial position is different from an assessment of the state’s annual budget. As my colleague and multiple state audits have noted, Missouri’s budget outlook remains troubling, with general revenue balances declining and spending continuing to exceed projected revenues. While Missouri’s improving financial position is welcome news, protecting taxpayers will require the state to rein in spending and put its budget on a sustainable path.
