The Missouri General Assembly starts its 2026 session this week with one overriding mission: to fix the budget mess it made last year.
And it’s a big mess, folks.
Legislators last year passed a giant — controversial — capital gains tax cut at the behest of Gov. Mike Kehoe.
They did so knowing that state revenues would drop somewhat: The expectation at the time was about $160 million. The actual number? Much closer to $500 million.
Oops.
Missouri Republicans — the folks who made this problem and are responsible for it — are going to have a “difficult budget year,” Dan Haug, the state budget director, told The Missouri Independent in December.
Don’t cry for Kehoe or his GOP buddies in the legislature, though. All of this was foreseeable.
Predictable? Predicted.
Why? Let’s start with the fact that Kehoe made his love of bad economic ideas eminently clear during his 2024 campaign for governor, allying himself with conservative voodoo economist Arthur Laffer.
You know — the same guy who helped Kansas Gov. Sam Brownback push the Sunflower State to the cusp of fiscal ruin a decade ago.
“When I’m governor, we’re going to cut taxes, spur economic growth, and put Missouri on the right path forward,” Kehoe said in a social media post featuring a picture of himself with Laffer.
If all of this makes you feel a little bit crazy, you’re not alone.
Missouri leaders had a front-row seat for the fiscal and political fallout from Brownback’s “tax experiment” disaster. It was right next door!
But they failed to heed the warning. What’s that old saying about history repeating itself? Oh, that’s right: “The second time as farce.”
It’s not just that Missouri’s current budget predicament was predictable, though. It was predicted.
Back in April — before the capital gains tax cut was finalized — the left-leaning Institute on Taxation and Economic Policy estimated the first-year price tag would be “$600 million or more.”
