Kehoe urges voter referendum to phase out Missouri individual income tax, outlines budget cuts
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Summary
In his 2026 State of the State, Governor Mike Kehoe asked lawmakers to pass a joint resolution putting a phased elimination of the individual income tax before voters, while proposing more than $600 million in core budget cuts and safeguards to protect K–12 funding.
Governor Mike Kehoe urged the Missouri General Assembly on Tuesday to pass a joint resolution placing before voters a question that would begin a phased elimination of the state’s individual income tax, with a full repeal within five years if approved.
"Should Missouri begin a phased elimination of the individual income tax with a full repeal within the next 5 years," Kehoe asked, calling the measure a first step that would let Missourians decide at the ballot box. He urged the legislature to vote this session to put the question before voters and said, if approved, his office would work with lawmakers next session to carry out the plan.
Kehoe framed the tax proposal as part of a broader budget discipline agenda. He said his recommendation trims "more than $600,000,000 from the core" of the state operating budget to correct what he described as a potential future spending imbalance that could exceed $2,000,000,000. He added his plan would preserve mandatory spending and priority items, including the Medicaid match, child-care subsidies and disaster relief, and said it would not cut core higher education or the K–12 funding formula.
The governor said the state has added "over 3,400 new budget items" since fiscal year 2022 at a cost he put at nearly $13,000,000,000 in new general revenue spending. He said any reversal of the proposed cuts should be accompanied by an offseting pay‑for.
Kehoe described safeguards in his plan to protect against downturns, including triggered reductions to the income tax rate and exclusions from extending sales taxes on agriculture, health care or real estate. "Eliminating the income tax is not about runaway sales taxes," he said.
Votes at a glance: the joint session recorded several procedural votes before and after the address. A motion to suspend House Rule 123 to allow the Senate and governor into the chamber passed (reported "yeas being 154 and 3 present"). Later, the joint session was dissolved by voice vote and the House adjourned until 10 a.m. Wednesday, Jan. 14, 2026.
What happens next: Kehoe asked legislators to pass the joint resolution this session to put the tax question before voters; if approved by voters, he said the administration would work with the General Assembly next session on implementation. The speech did not include implementing legislation or an enacted timetable beyond the referendum and general targets; details about specific statutory changes, revenue estimates, and impacts on local government revenues were not specified in the address.
