More Big Beautiful Medicaid Changes

Posted on by Mike Ederer

Missouri’s Medicaid enrollment is up by almost 400,000 recipients since 2019, but how many of those newly on the rolls are legally eligible to be there? As of now it’s hard to say, but before too long we’ll likely have a better answer.

Several weeks ago I started my deep dive into the many healthcare reforms included in the One Big Beautiful Bill (OBBB), specifically focusing on Medicaid. This week, I’ll discuss three of the bill’s provisions that are intended to improve program integrity and reduce waste.

  1. Increasing Redetermination Frequency: Instead of the current practice of checking each recipient’s eligibility once per year after they enroll in Medicaid coverage, the OBBB requires states to start doing so every six months. This provision isn’t solely about cutting costs, though Medicaid’s out of control spending should be reined in. It’s also about making sure that taxpayers are only covering the high cost of healthcare for those that really need it.
  2. Reducing Retroactive Eligibility: In the past, Medicaid would cover medical bills for new recipients up to 90 days prior to their joining the program. The OBBB shortens this window to 30 days in an effort to incentivize those who are truly eligible for the program to maintain their enrollment or enroll while they are healthy. If successful, this provision should improve program integrity and help lower costs by treating recipients earlier, before their ailments become more costly.
  3. Reversing Recent Actions: Toward the end of the Biden administration, several new Medicaid rules and regulations were promulgated that would significantly increase the program’s costs without much evidence of benefiting the health of recipients. The OBBB rolls back many of these rules, specifically one that would drastically raise the cost of nursing home care.

Taken together, the reforms contained in the OBBB represent a forward-thinking evolution of the Medicaid program. By focusing on clearer eligibility requirements, more practical retroactive coverage, and a scale back of burdensome regulations, these changes could strengthen Medicaid, making it more sustainable and better equipped to provide essential healthcare services for those who depend on it.

In my next blog post on the OBBB topic, I’ll dive into some of the healthcare reforms that will impact the entire sector, not just Medicaid.

Municipalities Should Not Be Commercial Landlords (I’m Looking at You, Chesterfield)

Posted on by Mike Ederer

Chesterfield, which is poised to be the largest city in St. Louis County, is attempting to get into the commercial real estate business. I mean that literally. The city is planning to purchase a commercial property building and operate it as a landlord. I can’t believe this has to be said, but municipalities have no business being in the commercial property business. I don’t think you have to be a libertarian extremist to believe that. The more extreme position is actually that owning and operating a commercial office building—or any business, really—is, in fact, the proper role of government. (In fairness to the city, they do plan to hire a property manager for the building.)

I attended the city council meeting where the relevant bill was introduced. Supporters of the proposal offered two different reasons why this was a good move for the city. First, supporters said the leases for the businesses in the building would pay the costs of the purchases, so the city would come out ahead. According to the Chesterfield city manager, the current leases “would mean the building would create no annual cost for the city.” This reminds me of the famous story of when former St. Louis Mayor Vince Schoemehl told some veteran members of the St. Louis Board of Aldermen that the new convention center downtown would not cost the city anything, and longtime alderman Red Villa responded with, “Well then, why don’t we build two of them?”

The other reason why supporters like the purchase is because Chesterfield could use some of the building for its own future needs, such as a police substation, civic center, or parks department headquarters (all these examples were given at the meeting). But here is the problem: If you use the building for city offices or needs (which may be the more defensible position), then you don’t have the paying tenants who will cover the price of the purchase for the city. Yes, the building’s parking lot would come in handy for some events at the nearby park, but, as opponents noted, that is just a few events each year.

Then there is the belief by the city that they won’t have to pay property taxes on the building, leading to a higher profit margin for the city (stated by a member of the board and elsewhere). That is a very dubious argument. There is plenty of case law that says if a tax-exempt entity owns property but that property is not used for tax-exempt purposes that property taxes are still owed. (Scroll down here for citations.)

If one believes that buying and operating a commercial office building is the proper role of local government, then I wonder what limits there would possibly be on the role of government? If a municipality can do this, what can’t it do? That’s the scary part.

How Often Should Schools Close?

Posted on by Mike Ederer

I’ve been writing a lot lately about the poor performance of Missouri’s schools; for recent examples, see here and here. I don’t enjoy being all doom and gloom, but I worry that many Missourians don’t grasp the scale of the problem. I can give plenty of examples of schools and districts in our state where most students are not testing at grade level, and many are not even testing within a year of grade level.

Yet these schools and districts rarely face meaningful consequences and there is virtually no threat that they will close, which raises an interesting question: How often should schools close? Frequent closures would clearly be disruptive, but too few could also be a problem. In a healthy education ecosystem, schools that consistently underperform should be replaced with better alternatives. That’s what would happen if the public school system operated like a market.

However, public schools rarely close. And when they do, it’s usually due to declining enrollment or budget cuts, not poor performance. As a result, even schools that fail year after year remain open and funded.

All of this points to a perverse indicator of the effectiveness of expanded school choice: more school closures. This may seem counterintuitive, but if charter and private schools close at higher rates than traditional public schools, it suggests they operate in a system where failure has consequences. That’s a good thing. Replacing inferior providers with stronger providers, through competition, helps make markets more efficient.

Given this background, I enjoyed reading this recent study by Doug Harris and Valentina Martinez-Pabon. It puts hard numbers on school closures nationally. The authors estimate that just 0.9 percent of traditional public schools in the United States closed annually between 2014 and 2018. In contrast, closure rates were 2.9 percent for private schools and 5.1 percent for charter schools—roughly three and six times higher, respectively. The higher closure rates are a sign of a healthier market.

It may feel like a foregone conclusion that failing public schools will always persist, but it doesn’t need to be. Infusing more competition into our education system will push all schools to perform better. And for low-performing schools that cannot figure out how to improve, it will force them to close, making way for new, higher-quality providers. These changes would benefit all children, but especially those who are currently trapped in persistently ineffective schools.

 

Understanding the Decline in Student Test Scores with Jim Wyckoff

Posted on by Susan Pendergrass

Susan Pendergrass speaks with Dr. Jim Wyckoff, professor at the University of Virginia and director of the Education Policy Ph.D. program, about the long-term decline in student academic achievement. They discuss how national test scores, especially for the lowest-performing students, began falling well before the pandemic, why the usual explanations like COVID or Common Core miss the bigger picture, and what states can do to reverse the trend, and more.

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Timestamps

00:00 Understanding Declining Academic Achievement
02:47 Historical Context of Academic Performance
05:43 The Impact of Policy Changes
08:31 Exploring Causes of Decline
11:14 Success Stories and Lessons Learned
13:51 The Role of State Legislation
16:49 Future Directions and Solutions

Episode Transcript

(Download)

Susan Pendergrass (00:00)
Thanks so much for joining us on the podcast, Professor Wyckoff of the University of Virginia. So you have a recent paper that really caught my eye. I’m puzzling over declining academic achievement in this country. And it’s something that I’ve been thinking about a lot. And sort of as a companion issue, I work in Missouri and I’ve been talking for a long time that Missouri enrollment’s been declining and folks are like, well, yeah, the pandemic—the pandemic, kids left public schools, but they’ll probably come back. And I’m like, no, no, we had our largest kindergarten class in 2013. Any data forecaster, demographer would see this coming. This is not a pandemic problem. And I think it exacerbated it, but I think this has happened with basic student test scores in this country, where people are like, well, the pandemic caused it, and we’re gonna come back out of this.
You have a paper that’s out recently on the fact that maybe the pandemic didn’t cause it and it predated it. So I’d love it if you could just tell me a little bit about what you found looking back and why, in my opinion, it’s a bigger problem than many folks are thinking it is.

Jim Wyckoff (01:03)
Sure. So I’ve been following sort of NAEP trends, as a lot of people do, because NAEP is an incredibly reliable source of information about academic achievement at certainly the national and the state levels, and to some extent at certain large districts, the TUDA districts. And so I’ve been noticing this trend for several years now where NAEP scores have been declining—predating the pandemic by a number of years. And these declines have gotten large by almost any metric we might use to measure student achievement.
A lot of people saw the very large declines that occurred during the pandemic. And again, there was lots of discussion in both achievement and political terms about what this meant and how we were going to attribute these losses.
Last fall, I started to get more serious about wanting to understand these trends. Quite honestly, it came from a place of having some ideas, but really wanting to figure it out. The title of the article is “puzzling” because I spent a lot of time trying to better understand these trends—how large are they, when did they begin—and asking questions to help make sense of what’s going on.
One of the more surprising conclusions was that the losses that had been occurring prior to the pandemic were about half as large as the total loss that occurred by 2024. And that surprised me a little.

Susan Pendergrass (02:55)
Yeah, so we were on a bit of an upward trajectory during the era that a lot of people didn’t like, but No Child Left Behind caused a lot of anguish. I remember my oldest was in third grade the first year of No Child Left Behind testing in Virginia—SOLs—and it caused a lot of problems. But it did have results, right? No Child Left Behind, this high-accountability, high-stakes testing that people don’t like, actually improved test scores, right?

Jim Wyckoff (03:28)
Yeah, I think there are, as you suggested, large increases in NAEP scores from the early 1990s to around 2009. These increases were large by almost anyone’s standards—over 50 percent of a standard deviation, which translates to nearly two years of learning. So these were consistent, large increases.
Around 2009, the scores leveled off and then began to decline. During that 1990 to 2009 period, a number of policies played a role. NCLB began in 2002 and ran its course until around 2013 before ESSA replaced it in 2015. The best evidence we have suggests that math scores improved as a result of NCLB. Not by as much as the broader achievement gains, but still meaningful increases.

Susan Pendergrass (04:50)
Yeah. And I think it should be pointed out that in the ’90s, governors all met—actually at the University of Virginia—and there was a broader push around academic achievement. For our listeners, Missouri tracks exactly with the national results. We peaked in 2009 and have been steadily declining ever since.
Last year in Missouri and nationally, four out of ten fourth graders were essentially not literate. They didn’t reach the “basic” level in reading. We don’t know where they are between zero and basic, but they didn’t register on the scale—they’re essentially illiterate. And that, to me, is a crisis. I don’t hear it being talked about like a crisis the way it was in the ’90s after a number of major government studies. But that’s where we are. We’re back to square one, essentially—long-term NAEP trends put us back to the 1970s.

Jim Wyckoff (05:51)
Yeah, certainly for the lowest-performing kids, the decline has wiped out gains made since 1990. As you’re suggesting, these results have important implications.
Since NCLB and other developments in the 2000s, I think there’s been less emphasis on academic achievement. Other issues have come forward. People have denigrated test scores to the point where we’ve missed opportunities to understand what’s going on.
And NAEP is a low-stakes, low-accountability test—nothing really rides on it. That’s why we believe it’s a strong signal of what kids are actually learning. And what they’re learning has declined significantly, as you’re pointing out.

Susan Pendergrass (06:52)
Let’s talk about your speculation as to what’s causing this. I’ve heard a lot about smartphones in classrooms, and states are starting to get active on that. You suggest it might be part of the problem. How so?

Jim Wyckoff (07:07)
Yeah, not just me—others have made this connection. Smartphones and social media really took off around 2009. Their use became much more widespread between 2009 and 2020. If you look at the data, smartphone and social media saturation grew rapidly in that period.
There’s evidence suggesting kids have become less engaged in school. That’s led to regulations about phone use in classrooms. But the problem extends beyond school—kids are less engaged with schoolwork outside the classroom too.
It’s hard to definitively link smartphone use to declining achievement, but there’s reason to believe it’s a contributing factor. Still, I don’t think any one issue—phones, NCLB, whatever—can account for the full decline. It’s likely a combination of multiple factors that vary by place and time.
And I think we’re not good at nuance in education. But we need a comprehensive, systematic approach to address this. There’s no single fix.

Susan Pendergrass (09:08)
We have some states—people are calling them “Southern miracles”—like Mississippi and Louisiana, that are doing much better in reading. But it’s not nationwide. We have broad declines, and then these little pockets of success. What does that mean going forward?

Jim Wyckoff (09:27)
I’m not sure we’ll ever come up with a good causal understanding of what caused these declines nationally. But I do think places like Mississippi give us reason for optimism.
In 2013, Mississippi got serious about the science of reading and implemented it rigorously, with supports to help teachers. If you look at their data, they improved reading scores during a period when national scores were declining. In math, they at least held steady.
Now, their scores haven’t continued rising as they did before 2009, but they’ve fared better than most. So while the science of reading isn’t a silver bullet, it’s part of the solution.
States have a real opportunity here. That includes focusing on accountability, proven policies like science of reading, and funding.
Many states cut education funding after the 2008 recession and didn’t return to pre-recession levels, inflation-adjusted, until recently. Teacher salaries fell and in some places still haven’t recovered.
Teacher quality, especially in low-performing schools, matters a lot. And demographics play a role too—we don’t measure poverty depth well, and English language learners are increasing in number.
We need state- and district-level analysis to understand what’s going on and invest in the things that work.

Susan Pendergrass (13:22)
My biggest concern is the fourth-grade scores. These kids are probably in sixth grade now, and one day they’ll go to high school unable to read their textbooks.
We’re creating an underclass that’s not going to catch up. While overall test scores are down, the steepest declines are among the lowest 10 percent of performers. I don’t know how we catch those kids up.
We’re seeing a smaller student population and a higher percentage of students who can’t read or do math. What kind of workforce will we have in ten years?
We’re dabbling in the science of reading, but accountability has dropped. Do you think Common Core contributed to this decline—or at least gave accountability a bad name?

Jim Wyckoff (14:35)
Yeah. Common Core got incredibly politicized—as a sort of top-down mandate—when in fact it came from organizations like the National Governors Association that were pushing for rigorous curriculum.
The underlying concept was good. Many states still use Common Core-style standards, even if they don’t call it that anymore.

Susan Pendergrass (15:05)
Missouri is one.

Jim Wyckoff (15:05)
Exactly. And the evidence linking Common Core to achievement declines is very thin. I don’t think it played a significant role. But like you said, these issues often get politicized and take on a life of their own.

Susan Pendergrass (15:32)
Your paper has great graphs showing projections of where we should be if we stayed on the pre-2009 trajectory. Have you done projections from 2009 forward? Because it doesn’t look good to me.

Jim Wyckoff (15:53)
If we continue the trajectory we’ve been on since 2009—or 2013—about half the decline we saw between 2019 and 2024 could’ve been predicted even without the pandemic.
So the pandemic worsened the problem, but it didn’t cause it. I see no reason to believe the decline would’ve stopped.
Unless we make serious changes, the downward trend is likely to continue. Especially for the lowest-performing group, there’s little evidence of any turnaround.
Among students at the median or higher levels, there is some evidence of recovery in math. But reading remains a problem across the board.

Susan Pendergrass (17:17)
So what should we do? I work at the state level a lot—what should state legislatures or education agencies do?

Jim Wyckoff (17:35)
This is a real opportunity for state leaders—governors and legislatures—to act.
We’re on the cusp of seeing real consequences in the workforce and higher ed outcomes. Governors could champion this issue. Academic achievement isn’t the only thing we care about in schools, but it’s a top priority.
We need to move past the cultural wars of the last decade. Most parents still care deeply about academic outcomes.
For kids from low-income families, education is their path to a better life—and we’re not serving them well right now.
This should be a bipartisan issue. Conservatives and progressives should be able to rally around this.
I know there are institutional barriers and some bureaucracies may not want the changes required, but I hope we see leadership from some states. And when we see success, others can follow.

Susan Pendergrass (19:52)
Yeah, and I really appreciate your scholarly approach to something I’ve been speculating about. This goes way back before the pandemic.
If we blame it on COVID, we’ll keep talking about “pandemic learning loss” when the issue runs much deeper.
We need to acknowledge the path we’ve been on and chart a better course. Where can people find your article or get in touch with you?

Jim Wyckoff (20:23)
The article is forthcoming in the Journal of Policy Analysis and Management. My email is [email protected].
I appreciate your interest in this topic and would love to see more people dig into it. What I’ve done is just the beginning.

Susan Pendergrass (20:48)
I couldn’t agree more. We’ve got to keep puzzling through these issues. Jim, thank you so much. Take care.

Jim Wyckoff (20:57)
Okay, thank you, Susan.

Produced by Show-Me Opportunity

Waiting for Perception on Crime to Change Is Not a Winning Strategy for St. Louis

Posted on by Scott Tanner

I’ve highlighted the progress St. Louis has made in reducing crime in recent blog posts. The improving data are positive news, and city leaders have taken several steps in the right direction to make this possible. While St. Louis still experiences high levels of crime well above the national average, things are trending in the right direction with homicide rates at the lowest in a decade However, even though crime is declining, that doesn’t mean that citizens’ perception of crime is changing.. Even if this trend of lower crime continues, it likely won’t significantly impact how safe people in the city feel. People don’t tend to make judgements of safety based on numbers alone.

In March of this year, KSDK 5 published an article titled “St. Louis leaders say crime is at a historic low, but public perception takes time to catch up.” The issue is that this isn’t necessarily true. Perception does not always “catch up,” although there certainly can be lag effects between the reduction in crime and the perception held by citizens. In fact, there are over 30 years of surveys from Pew Research showing that Americans believe there is more crime in the United States in the year they were surveyed than the year before. Violent crime rates have dropped by almost half over the span of these surveys beginning in 1993.

Even at the local level, citizens have misperceptions about crime and where it is occurring. Brookings surveyed people from some of the biggest cities in the United States, including Chicago, New York, and Philadelphia. One of the most common complaints was fear of going downtown due to higher crime. Data show that downtowns accounted for a very small percentage of the increase in crime in these cities. For example, Chicago experienced a 48% increase in property crime between 2019 and 2022, but downtown only accounted for 6% of this increase.

The examples above demonstrate that numbers and time don’t always solve the issue of the perception of crime not matching reality. If St. Louis is to close the gap, it must start with the appearance of the city. Police Chief Tracy briefly mentions in a quote from the KDSK article that quality-of-life crimes need to be addressed.

Quality-of-life crimes (substance use, panhandling, etc.) have an impact on how people feel about a particular area. Former New York City police commissioner William Bratton believed this so much that he implemented “broken windows” policing back in the 1990s, which was intended to crack down on these lower-level crimes. The rationale behind this was that by preventing smaller crimes, it not only prevented worse ones from occurring, but also symbolized that the city had control over the area.

St. Louis would benefit from following in the footsteps of New York and addressing lower-level crimes. A short drive across the city is enough to see the number of panhandlers and abandoned buildings in the area. Downtown is a prime example of an area where worries of crime have contributed to empty buildings. Multiple restaurants downtown have closed or cut hours due to the lack of business this year.

Preventing these quality-of-life crimes and cleaning up the streets impacts where people choose to go and helps determine how safe they feel in an area. It’s intuitive that citizens will make judgements on levels of crime based on the conditions of buildings and what is occurring on the streets more than what data shows.

Public perception to is unlikely to shift based solely on crime statistics. 30 years of data demonstrate this. Instead, it would be more beneficial to take appropriate measures to clean up the streets regardless of how much crime numbers are going down, because people will always care more about their own intuition when it comes to safety rather than the numbers.

In St. Louis County, Who Will Audit the Auditors?

Posted on by Mike Ederer

A version of this commentary appeared in the St. Louis Post-Dispatch.

When one thinks of no-show political jobs in Missouri government, most people (at least those with a knowledge of Missouri history) would think of the infamous Pendergast political machine of Kansas City a century ago. Giving out jobs to political supporters who rarely, if ever, were required to actually show up to work was a staple strategy of that machine (and many others). Over the past decade though, there has been another job reminiscent of the well-paid, no-show jobs of political yore: the St. Louis County Auditor.

In June, the St. Louis County Council fired the county auditor, Ms. Toni Jackson, for lack of work output after her office completed only two audits in her more than three years in the position. (The county auditor is one of the only jobs in county government that reports to the council instead of the county executive.) Jackson had been hired in 2021 after the council had fired the previous auditor, Mr. Mark Tucker, also for lack of audit output. How little work have the last two auditors been doing? A quick perusal of the St. Louis County Auditor’s Office website shows that the office has released just 13 reports since 2018. Many of these reports do not qualify as “audits.” For example, three of the 13 reports were short 2018 memos about pet adoptions.

By comparison, the St. Charles County Auditor’s Office released 13 audits in 2024 alone, many of them substantial. If you are keeping score, that is 13 audits in one year in St. Charles County, and 13 reports (including a few actual audits) over eight years in St. Louis County. As frustrating as the lack of production in St. Louis County has been, one almost has to admire the audacity of it all. In Tucker’s case, he also wasn’t properly qualified for the job, so some of the blame for hiring him was on the council. In Jackson’s case, she was well-qualified, at least on paper, so the fact that she didn’t do the work is all the more frustrating.

It’s not like St. Louis County government is so clean that it has no need for auditors. I know of at least two cases of county employees embezzling large amounts of money in the past two decades. A qualified (and courageous) auditor could have raised questions about the activities of former St. Louis County executive Steve Stenger, who went to prison for various nefarious activities right when the prior auditor was busily engaged in doing nothing. A state audit of Stenger’s criminal actions as county executive identified Tucker’s lack of qualifications and actions as one of the reasons Stenger got away with his activities for as long as he did. Stenger, a CPA himself, was well aware of Tucker’s poor record as auditor. The former county executive routinely criticized the council for hiring Tucker while quietly benefitting from Tucker’s inability (or desire) to track any of Stenger’s illicit actions.

There is a pressing need for quality audits in local government. In a review of New York State comptroller audits of New York municipalities between 2003 and 2009, 234 out of the 259 audits included reports of deficiencies and recommendations for improvements in internal controls. Twenty-five percent of those cities with internal control problems had funds missing or unaccounted for (though outright fraud or theft was likely not the reason in every one of those instances). Within St. Louis County, two unsupervised clerks were charged in 2023 with stealing $650,000 from the village of Flordell Hills.

One of the recent St. Charles County audits identified several county-operated phone lines that the county was improperly paying phone taxes on. (As a government agency, it is supposed to be exempt from those taxes.) The audit identified the oversight and the matter was corrected. Have the last two St. Louis County auditors saved taxpayers money with insightful analysis and helpful digging? Since it is impossible to identify problems by audits when you don’t do any real audits, we all know the answer to that question is “no”.

Unreliable auditors have compromised the effectiveness of St. Louis County government in recent years. While outside auditors have reviewed the county’s annual financial statements for accuracy, the lack of a proactive internal auditor has deprived county residents and taxpayers of the watchdog they need and deserve.

Tom Pendergast may have mastered the use of the no-show political patronage job, but it was auditors who helped end his reign and send him to prison for tax evasion. Government auditors aren’t going to detect waste, fraud, or errors with taxpayer dollars if they don’t show up to do the job in the first place. Hopefully, that simple requirement will be understood by whomever the council hires next.

“Just Let Me Write the Definitions”

Posted on by Scott Tanner

In The Power Broker, Robert Caro’s legendary biography of Robert Moses, Caro describes how Moses was fully capable of getting his way by writing things in legislation that none of the legislators understood, even as they passed it. In one example early in Moses’s career (which I am going to do from memory and not look through the entire 1,200-page book for), Moses wanted to take over control of water rights off of Long Island. So, he drafted a rather innocuous bill that contained an opaque reference to legislation from the mid-1800s about water rights off of New York, but which otherwise was written in the same manner as all other water rights–related issues that the legislature was familiar with in the 1920s. None of the legislators or their aides bothered to find and read that mid-1800s law (which was probably much harder to do before computers), so they voted on and passed a new law that they thought did X, when it in fact it did Y. Moses, of course, wanted it to do Y, and by the time the legislature discovered the difference it was too late to do anything about it.

This brings us to the recent Missouri Supreme Court ruling on whether or not counties can collect the sales tax on marijuana in incorporated parts of a county. The court ruled that counties can only collect the tax in the unincorporated parts of a county. This is what the state constitutional amendment said, so in that respect the court’s decision makes sense. However, the way the constitutional amendment was written had a different definition of “local government” than was previously used and generally understood in Missouri. Do you think most (or any) voters read to page 19 of a 38-page ballot description to see that, in this case, the definition of a county only applied to unincorporated areas?

Longtime former Missouri State Senator Clifford Jones used to say (I’m paraphrasing here), “You can pass any bill you want. Just let me write the definitions.” That is what the ruling by the Supreme Court is rewarding, and perhaps it had no other choice in the matter. We let initiative petition writers create a major change regarding how local governments operate, which very few people will see or understand, and then that change becomes law.

To be clear, county taxes are almost always collected countywide, not just within unincorporated areas. Yes, there are a few other exceptions, such as utility taxes, but that doesn’t justify initiative petition writers using obscurity as their ally, as in this case. (I am not disputing that a majority of Missourians wanted legalized marijuana. My concern is with the use of legal minutiae in initiative petitions to get other changes made at the same time.)

Missouri needs to reform initiative petition rules to make amending the Constitution more difficult. (In a future post, I will go into more detail about the specific reforms we need.) Otherwise, we will be subject to more well-funded, out-of-state efforts to change Missouri laws using seemingly popular ideas as cover for making major legal changes via obscure and unread ballot language. Did you read the 38-page document that accompanied the marijuana vote and described all of the legal changes? I doubt it.

Robert Moses would be proud of efforts to get what you want by secrecy. We are a republic, not a direct democracy, and we should act like it. Missouri needs initiative petition reforms.

Missouri’s Squandered Opportunity

Posted on by Elias Tsapelas

The first step toward finding a solution is admitting there’s a problem. It’s been obvious to anyone who’s been paying attention over the past half-decade that Missouri has a spending problem. The good news is that Governor Kehoe admitted as much when he signed the state’s budget bills before the start of the new fiscal year.

Longtime readers of the Show-Me Institute blog won’t be surprised by this admission, but hearing the governor finally acknowledge our state’s spending problem hopefully signals a coming course correction. This stands in stark contrast to Missouri’s lawmakers in recent years, who have largely ignored how out of control state government spending has become, despite all the data to the contrary.

Prior to state Fiscal Year (FY) 2026, which began on July 1, Governor Kehoe signed a $50.8 billion spending plan, which was about $2 billion less than what the general assembly sent him. It should be noted, and lauded, that the governor applied some fiscal sanity by vetoing more than 200 spending items. But it’s also important to keep perspective on our state’s current financial mess and how much work fixing it will require.

It’s easy to forget that as recently as FY 2019, Missouri’s government only spent a little more than $27 billion in total compared to the $50 billion for 2025. What’s changed? Missouri’s spending has exploded on almost everything: welfare, education, transportation—you name it, and spending on it probably increased.

In 2019, Missouri’s budget included a little more than $9 billion in general revenue funds (primarily state sales and income tax collections) and nearly $9.6 billion from the federal government. Today, our state plans to spend more than $15.6 billion in general revenue and $24.5 billion in federal funds. If you compare this to the state’s estimates for general revenue collections in the coming year of $15.3 billion, you can see that even after the governor’s vetoes, Missouri’s government is still expecting to spend $300 million more than it projects to bring in. That doesn’t even account for the high likelihood of supplemental funding requests later in the year, and that the state’s supply of federal funding is projected to fall by the billions.

Missouri taxpayers are stuck with a government spending far beyond its means. As recently as 2023, Missouri had nearly $8 billion in general revenue funds set aside that could have been saved for times of need, but instead the state has spent exorbitantly, whittling away at the surplus. Today, those excess funds have been almost entirely depleted. Governor Kehoe recently noted that without his actions to reduce spending, the state was expecting a billion-dollar shortfall going into the next fiscal year.

It’s hard to look at what’s happened with Missouri’s budget over the past five years and view it as anything but a squandered opportunity. Our elected officials managed to take historic tax revenue growth, unprecedented federal investment, and an $8 billion cash reserve and turn all that into a billion-dollar hole in the budget right as the state’s revenue forecasts are taking a turn for the worse. Going into next year, Missouri’s tax collections are projected to decline and there will be no more excess federal dollars to prop up the state’s unsustainable spending. It should go without saying that it is imperative that Missouri’s lawmakers finally get serious about getting the state’s finances back on track.

There’s no longer any dispute about whether Missouri’s finances are a problem. The better question is whether it’s too late to stop the bleeding. Perhaps the most important task for our state’s elected officials over the next year will be finding a solution that’s better than something akin to putting a Band-Aid on a bullet wound.

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Man on Horse Charging