JEFFERSON CITY — The House and Senate gave final approval to the state’s $48.7 billion operating budget Wednesday without an increase to the public school funding formula.
The final budget, pieced together after conference negotiations rectifying differences between the House and Senate, was approved two days before the constitutional deadline for finalization of 6 p.m. on Friday.
The 13 budget bills are now headed to Gov. Mike Kehoe, who will review them for signing.
The K-12 budget was passed in the House and Senate after contentious debate over potential underfunding of the public school formula and uncertainty on revenue projections.
House Bill 2002, which funds the Department of Elementary and Secondary Education, passed 83-68, just one vote above the minimum needed to pass a budget bill. The Senate followed suit hours later, passing the bill by a vote of 20-13.
Much of the debate centered on lawmakers’ decision to reduce the amount of proposed funding from the Capitol Commission Fund used to support education spending in the Senate’s version of the budget.
After work by a joint House and Senate conference committee, budget leadership instead decided to rely more heavily on projected revenue from the Blind Pension Fund, lottery proceeds and future sports betting revenue, which some believe are more unstable sources of funding.
The Senate originally proposed using $118 million from the Capitol Commission Fund, money traditionally reserved for long-term Capitol improvement projects, to help fund the state’s public education formula.
During negotiations between the House and Senate, lawmakers lowered that amount to about $73 million and replaced the remaining $45 million with projected revenue from the Blind Pension Fund.
Those opposed to the proposal criticized the shift away from money that is already available in the Capitol Commission Fund.
“This is a $45 million mistake,” said Rep. Betsy Fogle, D-Springfield, who serves on the House Budget Committee.
Fogle later unsuccessfully moved to send the bill back to conference committee.
“We are underfunding the formula that we passed to calculate what our schools need,” said Rep. Kathy Steinhoff, D-Columbia, who also serves on the budget committee.
Steinhoff criticized legislators for appropriating with what she called “maybe money,” as revenue streams from sports betting and lotteries are unpredictable.
“If schools were the priority, we would fully fund them first,” Steinhoff said.
Those opposed also pointed out the proposal falls about $190 million short of the number originally requested by the Department of Elementary and Secondary Education for the state’s foundation formula. The formula is the primary source of state funding for school districts around the state.
This comes at a time when Missouri ranks 48th in the nation for average teacher salary, according to the National Education Association’s 2026 report.
However, those in favor defended the proposal as fiscally responsible while arguing schools are still receiving historically high funding levels.
House Budget Chair Dirk Deaton, R-Seneca, defended the bill during a news conference before floor debate began, and said Kehoe opposed using too much Capitol Commission money for operating expenses unrelated to preserving the Capitol.
“The governor made public and private comments that he doesn’t want to see Capitol Commission money set aside for the state Capitol spent on one-time things, other things, and not the state Capitol,” Deaton said.
Deaton described the broader state budget proposal as an effort to slow spending growth while balancing uncertain future revenues.
“It’s a budget that starts to take a critical look at making sure that the Missouri state government (is) living within its means, just like Missouri citizens have to do around a kitchen table,” Deaton said.
He also defended the use of projected revenues in the budget process.
Rep. Darin Chappell, R-Rogersville, pushed back on criticism that the proposal cut education funding.
“Only in government is the lack of an increase considered a cut,” Chappell said.
Additional education-related investments in the budget package include $15 million for school transportation funding from the Capitol Commission Fund, a provision added by the Senate in committee that ultimately received bipartisan support in the House.
When the bill reached the Senate early Wednesday afternoon, Democratic senators echoed many of the same concerns voiced by their House colleagues.
Sen. Maggie Nurrenbern, D-Kansas City, a former high school teacher and a member of the Senate Appropriations Committee, said this was the first time in nine years that the foundation formula had not been fully funded.
“For the first time since 2017,” Nurrenbern said, “Republicans here, who have the majority, are telling our neighborhood schools that they’re not good enough.”
Nurrenbern and Sen. Doug Beck, D-St. Louis, also took aim at what they saw as dishonesty from Deaton on the education budget throughout the legislative session.
“Disappointed is the word that comes to mind right now on how this all went down,” Nurrenbern said. “I know we can do better, and I hope, moving forward, there will be a different person at the helm of the House budget, and I hope that person will lead with more integrity.”
“You can’t do business like that,” Beck added.
Several senators also identified regulating video lottery terminals, or VLTs, as a potential alternate source of revenue that could help fund education. Senate leadership, they said, should have kept that in mind before declining to act on bills that would have regulated VLTs.
“These machines are out here,” said Sen. Jason Bean, R-Holcomb, who sponsored VLT legislation this spring. “We have such an opportunity to bring to the people of the state of Missouri.”
Bean also mentioned that Illinois has seen over $1 billion in revenue generated from VLTs since regulating the gaming devices in 2010.
Public schools in Missouri are already funded in part by proceeds from the state’s Lottery Proceeds Fund, meaning there is precedent for revenue from forms of gambling going toward education funding.
Higher education
The House also approved House Bill 2003, which funds higher education and workforce development programs, by a 119-28 vote later on Wednesday.
Earlier proposals to overhaul Missouri’s higher education funding formula were ultimately removed from the final budget package during negotiations between the House and Senate.
The proposal would have shifted more university funding toward enrollment and performance-based metrics, which supporters argued would better reflect where students are attending school.
However, the plan faced bipartisan pushback from legislators and higher education leaders who worried it could significantly reduce funding for some regional universities and was being advanced too quickly without enough long-term planning.
Despite the proposal’s removal, Deaton said during an earlier news conference that Missouri’s current higher education funding structure remains “unsustainable.”
The Senate approved HB 2003 on Wednesday by a vote of 29-4. Democratic senators largely mirrored their House counterparts in celebrating the return of higher education funding.
Nurrenbern and Sen. Lincoln Hough, R-Springfield, both took issue with a clause tacked onto the end of the bill during conference.
The added language, which would require that a new higher education funding formula be established by Dec. 1, was decried by both senators as an attempt to legislate from the budget. At least in principle, budget bills deal solely with appropriations and contain no policy.
“We don’t do that here,” Hough said. “Appropriations bills are about funding things, right?”
President Pro Tem Sen. Cindy O’Laughlin, R-Shelbina, said in floor dialogue with Hough that the clause’s inclusion was justified because it concerns future appropriations.
“I believe that we all agreed that we need to look at the funding for colleges,” O’Laughlin said. “We need to develop a system of determining (if) we continue to fund as many colleges as we have, and if not, what is it we want to do about that?”