For years, the Show-Me Institute has scrutinized the Missouri Department of Elementary and Secondary Education (DESE) —not out of malice, but out of a desperate desire to see our students succeed. The state’s commitment to education is vast, in terms of both a constitutional mandate and billions of dollars. Yet, as we examine the latest DESE budget request, it’s impossible to ignore the contrast between the department’s boldness when asking for money and its apparent bashfulness about what it will deliver to Missouri’s students. This disconnect reveals a fundamental weakness at the heart of the agency and a failure to act in a way that provides clear, student-focused leadership and results-based accountability.

In its FY 2027 budget request, DESE is seeking just under $9 billion, $7.5 billion of which comes from Missouri’s public coffers, to execute its mission. A large portion of the budget revenue is distributed to districts through the Foundation Formula. Other big-ticket items are the state institutions for students and adults with disabilities, subsidizing childcare for eligible families, and offsetting district transportation costs. Beyond this, there is a laundry list of programs managed by DESE and funded by the state, such as virtual education, teacher of the year awards, and summer enrichment programs. “And while there is a thousand-page accompanying document that explains what each budget line item is, there isn’t any real explanation for why the money is being requested or how it furthers education in Missouri.

Ideally, the budget request should correspond to the Strategic Plan created by DESE, with each line item of the budget request connected to a stated goal of the agency. Unfortunately, the two documents are only very loosely connected, and the disconnect demonstrates a lack of transparent, performance-driven accountability.

According to the DESE Strategic Plan for 2023–2026, DESE’s vision is to improve lives through education via the four pillars of (1) early learning and literacy, (2) success-ready students and workforce development, (3) safe and healthy schools, and (4) educator recruiting and retention. To accomplish this, DESE has given itself the following five performance measures and three-year targets.

1. The percentage of students entering kindergarten ready to learn (from 54% to 60%).
2. The percentage of students scoring proficient or advanced on the English Language Arts state assessment (from 43.5% to 50%).
3. The percentage of students pursuing gainful employment after graduation (from 91% to 94%).
4. The three-year average of initial teacher certificates issued (from 3,662 to 3,850).
5. The three-year average annual teacher retention rate (from 89.9% to 91.2%).

Setting aside the fact that according to its Strategic Plan Scorecard it hasn’t hit any of the targets yet, this very short list of performance measures reflects an agency that is more focused on process and inputs than on measurable student outcomes. Where are the performance measures for math, science and social studies? What are the outcome goals for students with disabilities? Is all of the work of the 215 employees of the Office of Childhood to be measured by just the percentage of students entering kindergarten “ready to learn”? How does one even measure “gainful employment”? At the very least it seems like an easy number to game. How can we possibly measure the appropriateness of a 369-page, $9 billion budget request based on just these five items?

As they return to Jefferson City after the first of the year, it is time for the Missouri legislature to demand more from an agency asking for $9 billion. To hold DESE accountable and ensure taxpayer dollars are serving students first, the legislature should, at a minimum, require DESE to publicly issue an annual report that explicitly links every major budget request line item to a specific, measurable goal in its strategic plan. If a request does not directly advance a key student outcome, it should be subject to maximum scrutiny. And there should be repercussions for missing targets year after year.

The state constitution vests the responsibility for education in the legislature, not DESE. It is high time the legislature exercises its authority and forces DESE to replace its bureaucratic double-speak with real, measurable results for Missouri’s children. Our students deserve a budget that reflects a true commitment to their future, not one that simply preserves the machinery of a struggling bureaucracy.

The post It’s Time to Hold DESE Accountable appeared first on Show-Me Institute.

In St. Louis County, parts of the county are still recovering from the tornado, the county executive is under indictment (everyone is innocent until proven guilty), and county government’s 2026 budget forecast says there is an $80 million budget shortfall. The last part is the focus of this post.

Every government budget can be cut, and in every government budget there is enough waste and fat to be trimmed to make a difference. That said, cutting government spending is hard (I wish it weren’t). County governments in Missouri are not bloated bureaucracies wasting money hand over foot. They tend to operate fairly efficiently, at least by government standards. So, while making cuts should be the highest priority for the budget shortfall, I doubt that there is $80 million in waste and fraud to be trimmed. Some tough choices are going to have to be made. So, beyond cutting all the waste that it can, what should St. Louis County do?

First, if you are in a hole, stop digging. St. Louis County continues to inexplicably grant tax abatements and other subsidies that never live up to their promises. If these subsidies worked—and by “worked” I mean generated long-term revenues that outweighted the short-term costs—then St. Louis County wouldn’t be in this predicament in the first place. St. Louis County needs to stop giving away taxpayer money as part of a delusion that government planning grows the economy. And yes, this includes getting rid of the senior property tax freeze among other subsidies.

Privatization and outsourcing some services are always an important option for local governments. St. Louis County’s options here are limited, in that the county doesn’t operate any public utilities and it already provides many services via outsourcing. (This is, of course, all a good thing.) The biggest mistake county government has made in recent years is the debacle with the animal shelter. The county should never have taken the animal shelter back in-house. St. Louis County officials should admit their mistake and once again outsource management of the animal shelter.

One of the reasons St. Louis County is in this situation is that it has gone over a decade without a qualified county auditor catching mistakes and making suggestions for fiscal improvements. Hopefully, the recently hired county auditor can change that.

Now let’s talk about the revenue side. Nobody likes tax increases, but sometimes they are necessary. If the county were to consider raising taxes, what taxes should it either institute or increase?

St. Louis County voters have rejected a use tax several times, most recently in April, 2022. A use tax (which is a sales tax on online purchases) is probably the best tax option for the county from a revenue perspective. Two other options could be imposing a small county gas tax to help fund roads or a modest property tax increase. Both of these would be politically complicated.

Beyond all of this, cuts will have to be made. Those may be cuts to services people like, such as the police department or highway projects. But elected officials are there to make hard choices.

The post What Should St. Louis County Do about Its Budget Shortfall? appeared first on Show-Me Institute.

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.

The post Missouri’s Squandered Opportunity appeared first on Show-Me Institute.

His response to a laundry list of budget items that were earmarked for a particular school district was:

Given the State’s historic investments in education this year, it is incumbent upon local school districts to prioritize the use of their resources for this type of programming as they deem appropriate and necessary.

In other words, the Foundation Formula is intended to make sure that all districts have and are able to spend an amount that is “adequate” for the successful education of their students. The Foundation Formula funds should cover repairing an outdoor track in the Houston R-1 school district, not earmarks.

Some programs, such as the St. Louis reading literacy program or Kansas City for K-12 career literacy resources, were vetoed entirely because the budget contains “multiple other areas of funding for similar programs.”

Increases for programs such as the Teacher Recruitment and Retention Scholarships or the Workforce Diploma Program were removed. Perhaps the governor wants to see evaluations of the impact of these programs first.

All in all, the governor, along with his staff, appears to have finally taken a close look at the education items in the budget before signing it. Perhaps the next fiscal year, when the governor is involved from the beginning, will usher in a new era of responsibility and accountability for the spending of our hard-earned dollars.

The post Credit Where Credit Is Due appeared first on Show-Me Institute.

-An assessment of the 2025 legislative session
-The trend of unfairly blaming landlords for a variety of ills
-The extremely poor performance of Missouri’s schools
-A new law that will restrict cell phone usage in Missouri schools
-The disappointing lack of progress on budget and spending reform
-How perceptions about crime hurt Missouri cities

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The post Show-Me Institute’s June 2025 Newsletter appeared first on Show-Me Institute.

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The post 10 Ideas to Get Missouri’s Budget Back on Track appeared first on Show-Me Institute.

-A report on the legislative session
-An education policy win for Missourians
-Bad transportation policy in the Show-Me State
-The folly of subsidizing professional sports stadiums
-Missouri’s looming budget disaster
-Are teachers in Missouri getting the right education?

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The post Show-Me Institute’s June 2024 Newsletter appeared first on Show-Me Institute.

After passing the enormous budget, lawmakers declared mission accomplished. While it is true that the approved total budget will be the first in a decade that is smaller than the previous year’s, that is less of an accomplishment than one might initially think. Missouri’s budget has almost doubled over the past five years, from approximately $27 billion in fiscal year (FY) 2019 to nearly $53 billion today. Going into next year, the federal funds that helped make this budgetary growth possible are drying up, and state tax revenues are expected to stagnate or decline. In other words, due to Missouri’s balanced budget requirement, a smaller budget was all but assured before our elected officials took any action.

What is surprising about the budget is the way state tax dollars are spent. The approved budget calls for approximately $15.3 billion in general revenue spending (the fund where state tax dollars go). To put this number in context, in FY 2019, Missouri only spent $10.8 billion in general revenue, and we’re on track to spend about $15.8 billion this current fiscal year. To make matters worse, we’re only expecting to collect about $13.2 billion in net state tax dollars next year. To put it plainly, we’re planning to spend more than we take in. See the table below.

To spend more than we take in, the legislature will have to pull from reserves to make ends meet. Fortunately, the state does have some money set aside that could be used for this purpose, but using those funds may not be the best idea. The current year’s budget relies on spending down the state’s surplus. Doing so again would leave little excess funds left for future years, which is worrisome considering the financial headwinds our state is facing.

All told, Missouri’s budget for FY 2025, which begins on July 1, 2024, plans to spend about 90% more than the state government did in 2019. This level of spending should not be celebrated and is simply unsustainable. It’s time Missouri’s elected officials stop playing with fire, because it’s state taxpayers who are going to be the ones who ultimately get burned.

The post Legislature Playing with Fire appeared first on Show-Me Institute.

For months, I’ve been expressing concerns about this budget. After years of record-breaking spending growth, the well of exorbitant federal funds will soon be drying up, and state tax revenues are expected to decline or remain stagnant. Not to be deterred, in January, Governor Parson laid out his plan that recommended more of the same, including spending more than the state expects to bring in. Over the next few months, the House of Representatives worked to pare that plan back, ultimately finding some (but not enough) savings.

Over the past month, the Senate had been working on its version of the budget, but to no avail. Due to an apparent combination of time constraints and chamber dysfunction, the spending plan didn’t see the Senate floor until the day before Missouri’s constitution requires it be passed. The result of this delay was a budget that almost no one had seen in advance, yet still had to be approved by both legislative chambers over a matter of hours. All this had to happen without anyone making any changes.

The problems with this process should be obvious. Instead of each chamber having its own version of the budget to compare against the governor’s, and a conference committee process to reconcile differences, the compromises were made outside of the public eye. Instead of taxpayers being able to see how each chamber prioritizes spending, the lack of conference meant that there was no avenue for input from citizens on the final product. And instead of lawmakers having several days, if not weeks, to examine the proposed budget and suggest amendments, they were stuck with a take-it-or-leave-it offer.

Unsurprisingly, the approved budget looks like it leaves much to be desired. As Missouri’s legislators are fond of saying, passing the budget is the general assembly’s sole constitutional responsibility. Given the gravity of the assignment, it’s incredibly disheartening that the process played out the way it did. Over the next few weeks, I’ll continue unpacking the spending decisions of our elected officials. At this point, what’s clear is that Missouri desperately needs more budget transparency, and what happened this year should never be allowed to happen again.

The post No Way to Budget appeared first on Show-Me Institute.

What’s happening in Jefferson City?

Get the scoop on the expanding Missouri budget, transparency in healthcare pricing, and free-market policies at our Insider’s Hour!

Join us at one of two open discussions with Brenda Talent, David Stokes, and Elias Tsapelas from the Show-Me Institute.

Thursday, March 21

MAC West

1777 Des Peres Road

St. Louis, MO 63131

Doors open: 11:30 a.m.

Discussion and Q&A: 12-1:00 p.m.

Ticket Price: Sold out

The lunch event is at capacity. Tickets still remain for the evening event below. 

Thursday, March 21

Cafe Napoli

7754 Forsyth Boulevard

St. Louis, MO 63105

Doors open: 4:30 p.m.

Discussion and Q&A: 5-5:45 p.m.

Ticket Price: $15.00 (includes a beverage and light snacks)

Purchase Tickets Here

Speakers:

Brenda Talent CEO

David Stokes Director of Municipal Policy

Elias Tsapelas Director of State Budget and Fiscal Policy

The post March 21 in St. Louis: The Insider’s Hour with Show-Me Institute appeared first on Show-Me Institute.

For years, I’ve written about how big of a problem the Medicaid program is for Missouri’s budget. More recently, I’ve discussed our state’s broader budgetary troubles. Medicaid has long been Missouri’s single largest budget item, and the size of the program continues to only increase. Since 2020, program enrollment has increased by more than 40%, with more than 1.4 million Missourians now on the rolls. Additionally, Medicaid’s total cost has grown by nearly 80% in just four years, from approximately $10.8 billion to $19 billion.

One saving grace over this period of skyrocketing growth is that state taxpayers have been spared from the brunt of the cost increases due to an enormous injection of federal funds. This doesn’t mean that state taxpayers aren’t paying more for Medicaid today than ever before. In fact, state spending on the program has increased by more than 70% since 2020. But during that time, Missouri also experienced a tremendous run of state revenue growth, which, taken together with the increased federal funding, has meant that Missouri’s lawmakers have staved off addressing the long-running Medicaid cost problem. Going into next year, things are going to change drastically.

The federal government has ended its “enhanced” pandemic-era match for Medicaid funding. Typically, the federal government pays roughly 65% of Medicaid enrollee’s healthcare bills, but from 2021 until very recently, Missouri has received an additional 5% for adopting Medicaid expansion, and an additional 6.2% to help cover the increased program costs from the pandemic. Missouri lawmakers will have to replace the extra federal funds with state tax dollars.

This means that, without action, state lawmakers should expect the general revenue cost of the Medicaid program to increase significantly next year, likely by at least several hundred million dollars. And given that recent reports suggest that state tax revenue growth is expected to remain relatively flat, it’s possible the cost of Medicaid might even increase by more than the state’s tax collections. If that were to happen, unless reforms were made to the Medicaid program, significant budget cuts to other state spending priorities such as education, roads, or public safety would be needed to finance Medicaid’s cost growth.

Unlike the COVID-19 pandemic, the coming budgetary shortfall is entirely predictable. The federal government gave states more than a year’s warning for when it would be reducing Medicaid payments, but Missouri’s elected officials have thus far chosen not to prepare for that reality. Successfully reforming Medicaid will take months to implement, which means that time is running out if policymakers want to make the changes necessary to steer our state clear of the budgetary shortfall that’s ahead. Let’s hope state lawmakers realize this sobering truth before it’s too late.

The post Beware the Medicaid Hole appeared first on Show-Me Institute.

As I wrote last month, our state lagged much of the country in resuming its Medicaid eligibility redetermination processes following the COVID-19 pandemic. Instead of starting in April as many states did, Missouri began processing redeterminations a month ago on July 1. Now that there are three months of data from across the country to look at, a new report from the Paragon Institute estimates just how much Missouri’s foot-dragging might cost.

For a quick refresher, during the pandemic, the federal government barred states from checking whether Medicaid enrollees remained eligible to receive services as they normally would. As a result, Missouri’s program set new records for enrollment and spending. But the catch is that likely more than 20% of those enrolled today aren’t eligible for coverage, so once the federal government allowed redeterminations to resume on April 1, states had significant financial interest in rightsizing their program rolls as quickly as possible.

No, this rightsizing doesn’t mean removing people from the program who are still eligible to receive services. What it means is that states typically pay health plans monthly for each Medicaid enrollee, so if 20 percent of those enrollees are ineligible, just using Missouri’s current enrollment of 1.5 million, that means taxpayers could be paying the health care costs of 300,000 people they shouldn’t be. And that’s really expensive!

So how can Missouri clean up the program’s rolls as quickly and accurately as possible? And how much will it cost if they don’t? That’s what the Paragon Institute report tries to answer.

First, the report estimates how much is being wasted per month on ineligible enrollees. For Missouri, if 20 percent of program enrollees are in fact ineligible, that means more than $120 million is wasted every 30 days. The federal government is giving states 12 months to process all of their redeterminations, but since so much is wasted per month, and since the share of these costs paid by the federal government will be declining each quarter, the sooner the eligibility checks can be completed, the better. The report suggests that if Missouri were to process all 1.5 million redeterminations in 6 months instead of the 12 months allowed, approximately $364 million could be saved.

Additionally, not all current enrollees are equally likely to be ineligible. Paragon suggests states should be prioritizing the redeterminations of the recipients who are most likely to be removed in order to maximize the savings. All told, if Missouri were to follow all of Paragon’s suggestions (other than the ones that can’t be done because it’s too late), our state could end up saving $729 million. That’s no small amount of money.

The Paragon Institute report shows us how much money Missouri’s overpopulated Medicaid rolls are costing the state, and considering how our state Medicaid agency started processing redeterminations three months later than necessary, I’m worried taxpayers are about to watch their money burn. If time really is money, Missourians should keep their eyes peeled for at least the next 12 months.

The post The Budget-busting Cost of Waiting appeared first on Show-Me Institute.

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But perhaps the most interesting recent development on this subject happened Tuesday night. As part of the House’s annual budget debate, amendments were repeatedly added to spending bills that would explicitly stop state funding from going to DEI programs—not only in higher education, but in other state departments as well.

Now that the budget bills go to the Senate, this language will likely change or even be removed by the upper chamber. We’ll keep you posted on the progress of the budget bills and on the other anti-loyalty oath initiatives. The legislation remains a long way from crossing the finish line.

The post DEI-blocking Bills and Amendments Rain Down in “Loyalty Oath” Aftermath appeared first on Show-Me Institute.

• Tax cuts at the local level
• Transparency for stimulus funds
• How federal spending affects Missouri’s budget
• Missouri students falling behind
• Teacher salaries in Missouri

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The post Show-Me Institute’s December 2022 Newsletter appeared first on Show-Me Institute.

Though this change may not seem like a big deal, the prohibition on checking whether participants are eligible to continue receiving services has been the primary driver of unsustainable Medicaid growth in Missouri since 2020. When the pandemic began, and the federal government started doling out relief funds, Missouri’s enrollment was well below 900,000. But as a result of the federal government conditioning relief funding for Medicaid on states no longer removing enrollees that were found to be ineligible, Missouri’s rolls have since grown by more than 575,000. Today, there are more than 1.4 million Missourians enrolled in the program; more than 720,000 are children.

Initially, the prohibition on disenrollment was supposed to continue until the federal public health emergency for COVID-19 expired. It was not necessarily surprising that once enrollment checks were stopped that program enrollment would skyrocket. Welfare programs typically experience a lot of what is called “enrollment churn,” as participant circumstances move people in and out of eligibility. What was surprising to many (myself included) was the continued extensions of the federal public health emergency.

Missouri’s emergency declaration for COVID-19 response ended more than a year ago. While it’s certainly true that COVID-19 remains present in our society, it’s also true that emergencies aren’t meant to last forever. Policymakers seem to understand this, as there was bipartisan congressional support for allowing states to resume eligibility checks, regardless of the status of the federal public health emergency.

The coming year will likely be a consequential one for Missouri’s government, as billions in federal covid relief funds that have been propping up the state’s budget begin to dry up. There is perhaps no issue with bigger financial implications than reinstating eligibility checks for Missouri’s Medicaid program. As long as the state’s Medicaid agency is equipped to quickly and accurately process the long-awaited enrollment checks without issue, the program should begin to right-size quickly. And if the agency isn’t prepared, Missouri’s elected officials should be prepared to step in and provide the necessary support, because there are far too many state tax dollars on the line.

The post End in Sight for Runaway Enrollment? appeared first on Show-Me Institute.

And it’s [the Hancock Amendment] one of the reasons St. Louis County’s budget situation looks so dire, county officials say.

The [Hancock] amendment forces local governments to adjust their property tax rates to avoid excess revenues. When the county saw a sudden increase in assessed property values around 2007 and 2008, it couldn’t collect the windfall. . . . Then sales tax revenues also plummeted because of the Great Recession—about 10% of revenue from residents buying cars and shopping vanished.

As to the part about not being able to collect the property tax windfall, I hardly know where to begin. First of all, the reassessment process is not and never was intended to lead to tax increases (although it often does). Requiring tax rates to roll back is a good thing and should be more strictly enforced than it is. But in fact, St. Louis County government (and many other local governments) are getting just such a windfall this year from increased personal property taxes (which are exempt from rollback rules). St. Louis County will get almost $4 million more in revenue this year simply due to used cars increasing in value.

I also disagree with the article’s statement that the county “couldn’t collect” the windfall in rising home values. Over the past decade, total assessments in St. Louis County have increased 29%, with the bulk of that being home values. During that period, property tax rates have only been reduced by 10%, leading to a 14% increase in total property tax collections over the past decade. As for the “sudden increase” the county experienced in 2007 and 2008, the county did not lower its tax rate in those years. So, it did enjoy the benefits of the increase! (See page 167 in this CAFR.) When the county did lower the tax rate in 2009, it only lowered the debt rate, not the general fund rate. When assessed valuations started to fall in 2009, the county could have raised its property tax rate without a vote of the people to offset those losses, but it chose not to do that. Maybe they should have, and maybe they shouldn’t have, but the Hancock Amendment didn’t prevent St. Louis County from taking such action.

That 14% increase over the past decade does not include the current car-tax bonanza, and next year’s reassessment is likely to be substantial given the large increase in home values seen in 2021 and 2022. Yes, home values have leveled off the past few months, but assessed valuations will be set as of January of 2023, so any real decline in 2023 will not be captured. Combine that with the high inflation rates that local governments will use to reduce their rate rollbacks, and next year is likely going to be very expensive for taxpayers.

St. Louis County’s elected officials can ask taxpayers for a property tax increase at any time. Just because politicians don’t want to ask that, or voters may choose not to approve it, does not mean that the Hancock Amendment is a problem for local government. It is anything but. Just look at what has happened in Kansas City, where the school district is the only local government exempt from Hancock rollback rules. Assessments have skyrocketed in recent years, and taxes have not decreased at all in the Kansas City school district. That’s the reality without the Hancock Amendment, and it’s one I’ll pass on.

Note: The original version of this blog post incorrectly stated that the decrease in sales-tax revenue during the Great Recession was less than the approximately 10% that the county claimed. However, county’s figure (as reported in the Post-Dispatch) was correct. I had overlooked a sales tax increase approved by the voters during that period that accounted for the difference.  I thank Paul Kreidler from the St. Louis County Budget Office for pointing out my mistake.

The post The St. Louis County Budget appeared first on Show-Me Institute.

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It should be no shock that the past two years have been tumultuous and expensive for Missouri’s largest government program. Medicaid fulfilled its role as the state’s health coverage provider during a global pandemic, and on top of that, Missouri also adopted Medicaid expansion. These two factors have the potential to swing state Medicaid spending by billions of dollars.

Today, Missouri’s Medicaid program enrollment sits at the highest point in state history, which as I’ve written before, is in large part because of COVID-19. Fortunately, there’s hope that the federal state of emergency for the pandemic will end in the next few months. Such a move would represent a green light for states to begin once again checking whether program enrollees still qualify for the services they’re receiving (one of the conditions of receiving stimulus funds for Medicaid was not removing anyone from the rolls for the time being).

This is important because enrollment is the single biggest driver of Medicaid spending, and there are many reasons to believe that there are large numbers of ineligible enrollees right now. According to the Urban Institute, more than 350,000 current enrollees could lose coverage if the state starts checking eligibility again. To put that number in context, even if you assume the monthly cost of coverage for these enrollees is $400 (it’s likely higher), this is saying the state may be spending $140 million per month on people who don’t qualify to receive services!

It should not be controversial to insist that state tax dollars only pay the cost of health coverage for those who meet the qualifications to receive it. In normal times, federal law requires states to check eligibility regularly to ensure funds aren’t being wasted. Federal law also requires those who are qualified to receive benefits regardless of any administrative difficulties. This is a problem for many Missourians right now, as the wait time for application processing far exceeds what’s allowed by federal law. (It should be noted that those who are eligible for coverage when they apply will have their qualified costs covered retroactively once enrolled regardless of processing time.)

To summarize: There’s an enormous backlog of current enrollees whose eligibility needs to be checked, and once an eligibility check is completed we will likely see a major decline in total enrollment. But there’s also a sizable backlog of applicants who are waiting to be enrolled—and once that process is complete, total enrollment will increase.

The good news is that the governor and legislature appear to recognize the enormity of the task ahead; both have included increased funding to help reduce the administrative backlogs in their budgets. It’s anybody’s best guess how much Medicaid enrollment will fluctuate over the next year, but there are potentially billions of reasons that state taxpayers should care about enrollment numbers.

The post Medicaid’s Volatile Upcoming Year appeared first on Show-Me Institute.

A growing Medicaid program is nothing new for Missouri. Enrollment has crept higher in each of the past 21 consecutive months, dating back to the beginning of 2020. In that time, the program’s rolls have ballooned by more than 31%. In fact, enrollment in every single eligibility category (adults, children, elderly, persons with disabilities, pregnant women, etc.) has grown significantly over the past two years.

Keep in mind that program enrollment is the single biggest driver of Medicaid costs, which is a big part of why I was so concerned about Missouri expanding the troubled program. Even before Medicaid expansion went into effect, our state already expected to spend more on the program this year than ever before. In total, the program cost more than $11.5 billion last fiscal year, which was nearly 37% of the state’s budget. This year it’s expected to eclipse $12 billion for the first time.

Of course, the Medicaid program has been severely impacted by the COVID-19 pandemic. In response, the federal government approved multiple relief packages that include supplemental Medicaid funding. But this federal “relief” is now contributing to the state’s continued program growth. One of the early relief bills, the Families First Coronavirus Response Act, included a provision prohibiting states from removing anyone from Medicaid coverage unless the recipient asked to be removed or relocated out of state. This means that Missouri’s Medicaid agency stopped checking whether those already enrolled in the program were still qualified to receive services. Unsurprisingly, enrollment has increased in every month since, and it’s unclear when the agency will be allowed to resume eligibility redeterminations.

As I’ve written before, it’s long past time for Missouri’s elected officials to take the steps necessary to reform the state’s Medicaid program. Rooting out unnecessary spending in the Medicaid program should have been a higher priority before expansion, but now that continued enrollment growth is all but assured, it’s a necessity. How much longer can state taxpayers afford to foot the bill for this runaway spending?

The post Medicaid Expansion Fuels Enrollment Growth appeared first on Show-Me Institute.