2026 Missouri State of the State | Roundtable

Posted on by Zach Lawhorn

David Stokes, Elias Tsapelas, and Avery Frank join Zach Lawhorn to break down Governor Mike Kehoe’s State of the State address, including what we know so far about his plan to eliminate Missouri’s income tax, proposals to modernize Missouri’s tax system, and the need to rein in state spending. They also discuss open enrollment legislation, the new Missouri Advanced Nuclear Task Force and AI strategy executive order, the push to privatize downtown St. Louis convention center operations, what the Dome’s history says about stadium subsidies, Kansas City’s stadium debate, what they are watching in Jefferson City, and more.

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Produced by Show-Me Opportunity

Data Centers Will Require Innovation in Missouri’s Energy Sector

Posted on by Mike Ederer

A version of this commentary appeared in USA Today.

I remember when Game of Thrones was at the height of its popularity and its catchphrase seemed to be plastered everywhere I looked: “Winter is coming.” Today a similarly ominous refrain is echoing across the energy sector: Data centers are coming.

A data center is a physical location that houses servers and related hardware that process, store, and transmit digital information. As artificial intelligence use expands, demand for computing power is also rising at a feverish pace, driving the need for more and more energy-intensive data centers.

As in Game of Thrones, there is a certain mystery surrounding how dire the situation truly is.

In April 2024, Goldman Sachs forecast that data centers would rise from 2.5% to 8% of all U.S. electricity usage by 2030. However, Google recently reported a 33-fold reduction in their energy usage for AI text prompts in a single year. It is difficult to predict how much more energy will be needed in the coming years.

Current Missouri law protects average ratepayers from “any unjust or unreasonable costs from service to such customers [such as data centers].” However, this does not mean none of the burden of building new generation capacity will fall on ratepayers, and an overbuild based on overly aggressive demand projections could leave them paying for unused assets.

On the other hand, failure to build sufficient power supply (whether due to demand miscalculation or delays in constructing multiple plants) could cause Missouri to miss out on significant investment in the state. Worse, an underbuild could create real reliability concerns. There is real tension here, and a great deal of pressure to predict and build effectively.

Fortunately, there is a policy that could help alleviate some of this pressure: consumer regulated electricity (CRE).

The premise of CRE is fairly straightforward: allow consumer-regulated electricity utilities (CREUs) that are disconnected from the ratepayer-supported grid to create “private energy islands” for the largest new customers (such as data centers). This approach makes sense for two reasons:

  1. The anticipated surge in demand is expected to be fueled by a small number of users. By isolating the electricity supply of these customers from the ratepayer-supported grid, CRE can help shield everyday customers from spikes in energy prices.
  2. The increase in demand is predicted, but it isn’t certain. CRE ties both the risk and the possible rewards of building new power plants to the companies that will use the resulting energy.

This year, New Hampshire passed a law to allow CREUs to generate, transmit, distribute, and sell electricity as long as they operate independently from existing utilities and do not serve the general public (CREUs are still subject to appropriate oversight, such as the Nuclear Regulatory Commission for nuclear plants). Missouri could do something similar, and there are many reasons to do so.

#1: Protecting Ratepayers from Risk

If the projected surge in electricity demand materializes, CRE could help lessen the severity of rate increases by allowing some large customers to be served by independent CREUs. Because these facilities are privately financed and serve only their customers, their costs would not be spread across all ratepayers. If electricity demand falls short of projections, then the excess capacity will have been a poor investment.

#2: Accelerating Capacity Buildout and Investment

 Missouri needs to build new generation capacity. In a permission-first, regulated environment, that process can be slow. Letting CREUs build and operate their own generation facilities could help keep economic development from being constrained by red tape.

Further, CREUs could offer more tailored payment structures and allow companies to align their energy sources with their own environmental or strategic goals—without forcing all ratepayers to work toward those same goals.

#3: Alleviating Pressure

Not only does Missouri face new demand growth, but our two largest electric utilities are dealing with coal-plant retirements. This transition would be challenging even without a new surge in demand. CREUs would allow utilities to focus more on serving their current customers.

CRE could be an ideal response to an abrupt surge in energy demand driven by a narrow set of customers. It would provide price security to everyday ratepayers, give data centers control over their power supply, and decrease the need for governments to predict future energy demand. Data centers are coming, and CRE is worth exploring as a way for Missouri to prepare for them.

Kehoe Continues to Prioritize MOScholars in his State of the State Address

Posted on by Scott Tanner

MOScholars is an Education Savings Account (ESA) program that provides scholarships for students in Missouri to attend schools outside of their local school districts. While most participants use MOScholars to enroll in private schools, the program can also be used by nonresident students to attend public school districts that choose to opt in. I’m a big fan of MOScholars, and it features prominently in our 2026 Blueprint for moving Missouri forward.

Governor Kehoe reinforced his support for MOScholars in his recent State of the State address. Building on the $50 million state investment approved during the 2025 legislative session, the governor is calling for an additional $10 million this year, bringing total funding to $60 million. These public funds will be combined with contributions generated through state tax credits to expand school choice opportunities for families across Missouri. Although MOScholars remains small relative to the size of Missouri’s K–12 student population, this proposed increase is a clear positive step toward a richer and more robust school choice landscape.

The governor also announced that Missouri will opt into a new federal tax credit program designed to operate much like MOScholars, but funded through federal tax credits. Under this program, taxpayers may redirect up to $1,700 of their federal tax liability to support school choice in Missouri. If widely used, the federal credit could significantly expand the pool of available funding—possibly enough to generate meaningful competition within the state’s education system.

These developments provide real cause for optimism about the future direction of education policy in Missouri.

Meaningful School Report Cards are on the Way

Posted on by Scott Tanner

I was thrilled by the governor’s State of the State address this year, where he emphasized letter-grade report cards for school districts as a priority. In fact, he announced an executive order that will require the Department of Elementary and Secondary Education (DESE) to produce informative and differentiated school report cards with letter grades by June of this year.

This is a much-needed improvement to school accountability in Missouri. Parents and community members will finally have access to clear information about how their local schools are performing.

Following the governor’s address, I wanted to re-up my post about school report cards from last May, which helps to explain why the letter-grade requirement is sorely needed and how it improves upon our current school report card system.

It is printed in full below.

———

Information Overload and Missouri School Report Cards

Have you ever started reading the warning label on an over-the-counter drug like aspirin or ibuprofen? Ever finished one? Probably not.

Drug warning labels are classic examples of information overload—so packed with details that they become practically useless. Unfortunately, the school report cards produced by the Missouri Department of Elementary and Secondary Education (DESE) suffer from the same problem.

In theory, these report cards should help parents and community members quickly understand how their local schools are performing. When well-designed, they can promote transparency and inform decision-making. But if a school report card is not organized and does not emphasize the most important information, it functions like a drug warning label. It can include a lot of detail but be of little practical value.

If you’re curious to see this for yourself, here is a link to the school report cards made available by DESE. Choose a district, then a school, and you can scroll through a vast amount of information. However, after you’ve taken the time to look through it all, you may realize you haven’t learned very much. DESE’s report cards may be comprehensive, but they fail to deliver what busy families need most: clear, accessible information about school quality.

Now, contrast the Missouri report cards with this report card for Briarmeadow Charter School in Houston, produced by the Texas Education Agency. At the very top, letter grades in four categories are displayed prominently:

  • Overall Rating: A
  • Student Achievement: A
  • School Progress: A
  • Closing the Gap: A

With just a glance, you know where this school stands.

Texas is not alone in this approach. States such as Florida, Illinois, and Louisiana also use summary performance indicators on their school report cards to give the public a clear picture of school quality. Unlike Missouri, these states are courageous enough to rate schools based on performance, and most importantly, publicly identify schools that are failing to educate their students.

It’s no coincidence that students in states with strong transparency and accountability policies, including clear and informative school report cards, consistently outperform Missouri students academically. These policies are key drivers of school improvement, and without them Missouri is only likely to fall further behind. School report cards that are informative about actual school performance are a simple way to get our state moving in the right direction.

No Adult Left Behind, How Politics Hijacks Education Policy with Vlad Kogan

Posted on by Susan Pendergrass


Susan Pendergrass speaks with Vladimir Kogan, professor of political science at The Ohio State University, to discuss his new book, No Adult Left Behind, How Politics Hijacks Education Policy and Hurts Kids. They explore why the No Child Left Behind era is increasingly viewed as a high point for academic accountability, how low-turnout school board elections skew decision making away from students, and why policies like four-day school weeks often serve adult interests rather than children, and more.

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Find Vlad’s book here: bit.ly/3KQzCJv

Produced by Show-Me Opportunity

The Amazing Case of Steubenville, Ohio

Posted on by Scott Tanner

Over at The74, Chad Aldeman wrote an excellent article about the remarkable reading results in Steubenville, Ohio. He shows that the literacy rate among third graders in Steubenville City Schools has consistently hovered between 93 and 99 percent since 2016. In 2024, 100 percent of Black students, 99 percent of low-income students, and 92 percent of students with disabilities in Steubenville scored proficient in third-grade reading.

Steubenville must be rich, right? Nope. The poverty rate in Steubenville is among the highest in the state, which makes its literacy rate all the more impressive.

Steubenville then must have access to more funding than other districts? Wrong again. Steubenville’s per-pupil spending is below average in Ohio, and below the average in Missouri.

So how does Steubenville do it? It’s hard to be sure, but Aldeman’s article suggests an intuitive explanation: the district emphasizes literacy skills through and through. He gives several examples. Steubenville offers subsidized preschool where teachers emphasize speaking in complete sentences as language practice for later, when kids begin learning how to read. Every elementary teacher, even the physical education teacher, leads a reading class. And Steubenville kids practice reading constantly, either as part of the whole class or in small groups, and they work on their fluency skills by reading aloud to each other.

I’m not sure which aspects of Steubenville’s approach are most important, but what stands out to me is the district’s clear commitment to the purpose of teaching literacy. And sure enough, the results follow. This stands in stark contrast to what is happening in many schools today, where mission creep has led to a proliferation of objectives, implicitly (and sometimes explicitly) de-emphasizing the core competencies our schools have historically emphasized, such as literacy, numeracy, science, and civics.

So, cheers to Steubenville. I hope districts elsewhere—including in Missouri—recognize its success and work to emulate Steubenville’s approach.

Crime and Public Safety in St. Louis: Upcoming Events

Posted on by Patrick Tuohey

Please join us for an in-depth discussion on crime and public safety trends in St. Louis. Patrick Tuohey, Senior Fellow at the Show-Me Institute, will be joined by local experts Gabe Gore, St. Louis Circuit Attorney;  Janet Lauritsen, Curators’ Distinguished Professor Emerita at the Department of Criminology and Criminal Justice, University of Missouri–St. Louis; and Pernell Witherspoon, Senior Professor of Criminal Justice at Lindenwood University.

Over the past five years, the number of crimes committed in St. Louis has decreased, however the city is still widely perceived as dangerous. What are the actual crime statistics, what are their real implications, and what shapes public perception? Our panel of experts will address these questions and more.

Don’t miss this opportunity to gain valuable insights, share your perspective, and participate in an informed community conversation on crime and public safety in St. Louis. Two Opportunities to Attend:

Event Details
Wednesday, January 21
The Knight Center at Washington University

Tuesday, February 10
MAC West

Reception at 4:30 p.m., including beverages and light appetizers
Program and Q&A from 5:00 to 6:00 p.m.

Registration
Please register for this complimentary event by emailing [email protected]. Include your name and specify which date you will attend. Walk-ins will not be admitted.

Is the Chiefs Move to Kansas Really a Done Deal?

Posted on by Patrick Tuohey


Patrick Tuohey joined Pete Mundo on Mundo in the Morning on KCMO Talk Radio to question whether the Kansas City Chiefs’ move to Kansas is really a done deal. He explains why unresolved financial details, uncertain STAR bond math, and the lack of taxpayer backing raise doubts about whether the proposed stadium plan can move forward as advertised.

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Kansas’s Coming STAR Bond Tax

Posted on by Scott Tanner

Proponents of the effort to use STAR bonds to build a billion-dollar domed stadium for the Chiefs are adamant that no new taxes will be levied to pay for the project.

In Kansas, Sales Tax and Revenue (STAR) bonds are a state-level form of tax-increment financing, similar to taxing districts created by municipalities in Missouri. The state issues bonds to pay for development costs and then repays that debt using only the additional state sales taxes generated inside the project district. The claim is that the project’s shoppers—not general taxpayers—will cover the cost.

The sheer size of the STAR bond being considered for the Chiefs is staggering, and Kansas leaders will likely need to be creative to satisfy the risk being taken by potential bond buyers. I don’t envy them in that task.

The tax question is another issue. The STAR bond will determine the base year of sales tax revenue. You might assume that the base year would be 2025 or 2026, but it could conceivably be 2020 or 2015. But whatever the year, once that dollar figure is determined, everything collected anywhere in the approximately 300-mile district in excess of that dollar figure will be dedicated to pay for the Chiefs’ projects for 30 years. Mind you, the cost of delivering public services will continue to rise due to inflation or, say, due to huge infrastructure projects developed to support the stadium. But the sales tax revenue to pay for those needs is frozen at the base year level.

What then happens?

In Missouri we got the answer in 2016. Due to Kansas City’s profligate subsidy culture, property tax revenue, which libraries depend on, was flat. And so the Mid-Continent Library system sought an increase in property taxes. In doing so, the library observed:

[T]ax incentives and abatements by local government have impacted the revenue that would generally result from the growth of the Library’s tax base. The Library’s budget has been essentially flat for the past 8 years.

Advocates of subsidies often argue that they are free, because they are paid for with funds that wouldn’t exist anyway. This is exactly the argument Kansas Governor Laura Kelly makes ad nauseam. But as we learned in Missouri, that just isn’t true.

Kansans might not see tax increases going to the Chiefs’ project, but they are very likely to see tax increases because of the Chiefs’ project.

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