It’s nothing new that Missouri’s state government has a spending problem, but as we head into 2024, there’s fear that this may finally be the year that our elected officials’ penchant for spending breaks the bank.
For years now, I have written about how Missouri’s spending habits will eventually prove unsustainable. As a quick reminder, Missouri has set a new record for the largest budget in state history in each of the past thirteen years. Between fiscal years 2019 and 2023 alone, the state’s total budget nearly doubled, and spending of state income and sales tax dollars grew by more than 42%. In other words, this isn’t a trend that can be explained away as solely a federally fueled phenomenon.
Of course, it is true that over the past few years Missouri has received an enormous influx of federal funds as part of the response to COVID-19 and the large infrastructure bill. But as it always does, the federal government will soon begin winding down its state aid, leaving Missouri’s lawmakers with the difficult task of deciding how to fill the holes that their federal counterparts left behind.
As I explained in my report last year, Saving Federalism¸ government spending typically only grows, and lawmakers in Washington, D.C. are a major reason why this is the case. The most common way the feds have kept perpetually growing spending has been through increased financial support during times of emergency.
During the 2008 recession, and again in recent years, the federal government has offered states generous funding to keep their budgets afloat and help them avoid the need for any service cuts. But at the same time, federal officials create or expand government programs that they have no intention of funding at the same level going forward, knowing full well how difficult it will be for states to pick up more of the bill or scale back the program once the emergency is over. This is exactly what Missouri’s government will begin experiencing in 2024.
As next year’s budget requests for the state’s executive departments show, state taxpayers will need to chip in hundreds of millions of additional dollars to continue funding the services expanded by the federal government’s initiatives. Two of the most expensive examples include further extending Medicaid coverage to individuals who likely don’t qualify for the program, and continuing rate increases with state taxpayer dollars for federally subsidized child care that go beyond what the federal government will cover. To be clear, these are dollars that would otherwise be used to fund Missouri’s—not Washington, D.C.’s—spending priorities.
Making matters worse is that reports indicate that state tax collections are down compared to last year, meaning that Missourians can less afford this added expense than in years past. Going into the 2024 legislative session, it’s clear that reining in the budget should be one of our lawmaker’s top priorities. The first step should be rejecting funding for any effort to make temporary federal programs permanent.
