The Missouri House voted Monday to spend state general revenue to serve people enrolled under the Medicaid expansion program for the first time since it was passed by voters in 2020.
The $76.7 million item is part of a $3.15 billion supplemental spending bill that would push total appropriations for the year ending June 30 to $55 billion. That total may stand as a record for at least a few years — Gov. Mike Kehoe’s proposed budget for the coming year would spend $54.5 billion.
And just a few hours before the 130-11 vote to send the bill to the state Senate, a leading Republican on the House Budget Committee said he wants to cut $2 billion — including $500 million in general revenue — from three departments providing safety net services to millions of Missourians.
The extra general revenue spending approved Monday for what is called the adult expansion group — people ages 18 to 64 with limited incomes — is part of an overall appropriation of $521 million, mainly federal funds needed by June 30. The traditional Medicaid program of hospital, nursing and other medical care will receive an additional $535 million to finish the year.
Lawmakers appropriated about $15.1 billion, including just under $2 billion general revenue, for Medicaid during the 2025 session.
Other major items in the supplemental spending bill include:
• $1 billion for disaster recovery efforts in St. Louis and other locations for tornadoes and storms in 2025.
• $635 million for the Department of Transportation road program.
• $100 million of the $216 million Missouri received for the Rural Health Transformation Program.
• $59.5 million of federal security funding for the FIFA World Cup matches this summer in Kansas City.
The only item that drew much discussion during Monday’s debate was the money for MoDOT. It is included because lawmakers cut spending from the State Road Fund as part of an effort to wrest control of some department funding from the Highways and Transportation Commission.
State Rep. Don Mayhew, a Republican from Crocker, resents the Western District Missouri Court of Appeals decision that found the commission could spend money from the road fund even if lawmakers did not make an appropriation.
“Clearly, a part of this appropriation is unconstitutional,” Mayhew said. “In fact, I even have judges that agree with me on that particular fact.”
House Budget Committee Chairman Dirk Deaton, a Republican from Noel, said Mayhew’s interpretation was wrong and he had assurances from the commission that it would not spend more than lawmakers will approve.
The Constitution, Deaton said, doesn’t “preclude us from making appropriations, which we historically have always done, and we will do in this case as well.”
Budget woes
Despite the extra funding that cleared the House Monday, Missouri faces a contracting budget because state revenues are expected to decline precipitously in the final months of the current fiscal year and an historically high general revenue surplus is slowly being exhausted.
Kehoe’s budget proposal for the coming year anticipates the general revenue balance — which peaked at $5.8 billion in June 2023 — will be about $265 million on June 30, 2027.
So far, the dire forecast that state general revenues will decline by 2.1% in the current year have yet to show up in daily receipts. Through Friday, revenues have increased 1.7% year-to-date.
State budget officials predict that refunds forced by a capital gains exemption will send daily revenue reports into negative territory starting next month.
To save general revenue, state Rep. Darin Chappell, a Republican from Rogersville said Monday afternoon he wants to cut $500 million in general revenue from the state health, mental health and social services departments.
Chappell, who chairs the budget subcommittee overseeing those departments, gave members until noon Tuesday to suggest places to cut.
Chappell estimated that the general revenue cuts would cost the state another $1.5 billion to $2 billion in federal funding. Overall, the proposal would reduce Kehoe’s proposed general revenue budget for the state’s health, mental health and social services departments by 9%.
Chappell said the cuts are a matter of simple math.
“When the money’s gone, the money’s gone,” he said.
State Rep. Betsy Fogle of Springfield, the ranking Democrat on the House Budget Committee, told The Independent the requested cuts would reduce Missourians’ quality of life.
“I don’t know how we cut the budget an additional $2.5 billion in a way that does not leave lasting impacts on the most vulnerable people in the state,” Fogle said.
Chappell told The Independent that he can’t say where he will recommend cuts until he collects feedback from committee members.
But he intends to restore Kehoe’s $80.7 million proposed cut from funding for disability care services as well as other cuts to substance use disorder services.
“I’m going to do my dead-level best,” Chappell said, “to make sure those are funded, but find that money elsewhere in the budget.”
