Kehoe promotes Amendment 5 at chamber event

In a Queen City appearance days before the Aug. 4 primary election, Gov. Mike Kehoe advocated for Amendment 5, which seeks to phase out the state’s income tax.

Kehoe was in town as the keynote speaker for the Springfield Area Chamber of Commerce’s annual State of the State event, held July 29 at Great Southern Bank Arena. The luncheon on Missouri State University’s campus drew an audience of roughly 680, according to chamber officials.

Speaking for roughly 20 minutes, Kehoe quickly covered multiple topics, including the state’s 2027 fiscal year budget, which he referred to as “challenging.” He also discussed events such as the National Route 66 Centennial Kickoff Celebration in Springfield and the FIFA World Cup, for which Kansas City was one of the host sites. He devoted his last several minutes speaking about Amendment 5, one of four statewide issues voters will consider on the Aug. 4 ballot.

Kehoe noted in his speech that elimination of the state income tax was part of his campaign’s when he ran for governor in 2024.

“If we want more businesses, more families, more investment and more reasons for our children and grandchildren to stay here, we need to have something like this as that reason,” he said. “Our approach includes safeguards to ensure fiscal responsibility through triggered reductions. This is a revenue-neutral plan. Growth first, then tax cuts because this has to be done deliberately, it has to be done responsibly, and it has to be done so it’s sustainable.”

The fair ballot language for Amendment 5 states that a yes vote would require a legislative phase-out and elimination of the individual state income tax based on revenue growth, while authorizing the expansion of sales and use taxes by legislators. If passed, the amendment would curtail constitutional limits on taxing goods and services and require local tax rate cuts without reducing school funding if local sales tax revenue increases, according to the fair ballot language.

Eliminating the income tax is “not about runaway sales taxes,” Kehoe said. The state’s income tax has been reduced incrementally over an eight-year period by roughly 1.5 percentage points to its current rate of 4.7%.

Brent Sager of Branson, president-elect of Missouri Realtors, recently told Springfield Business Journal in an interview that Amendment 5 allows the state to suspend the 1980 Hancock Amendment, which restricts the legislature from imposing a tax on the people without a vote of the people, for a period of five years.

The nonpartisan Missouri Budget Project said the state income tax currently generates $8.5 billion per year and supports 64% of the state general revenue budget. However, Kehoe spoke to members of the media after the chamber event and disputed the percentage, noting the roughly $9 billion is out of a nearly $51 billion budget.

“It’s a significant amount. Don’t get me wrong,” he said, adding the proposal would require the legislature to rewrite a nearly 100-year-old tax code.

Kehoe said he was uncertain if sales taxes would have to go up. It’s a decision he said would be up to legislators.

“They’ll definitely have to be widened because there’s the e-commerce world that we live in now that nobody ever thought of capturing sales tax on because it wasn’t a thing 20 years ago, much less 100 years ago,” he said.

Budget reflection
In his speech, Kehoe said every dollar government spends belongs to the people, not elected officials. The governor signed the $50.7 billion budget on June 30.

“This year, we signed a balanced budget that continues investing in Missouri’s priorities while maintaining the fiscal discipline taxpayers totally expect of their elected officials,” he said, noting that process included carefully reviewing spending and making difficult decisions when necessary. “Stewardship sometimes means saying no, even to good projects. Across Missouri, there were worthwhile local projects that didn’t make the final budget, not because they weren’t worthy, but because our responsibility to balance today’s needs have to meet with tomorrow’s obligations.”

Local items that were vetoed include $100,000 for Dallas County jail upgrades, $200,000 for Court Appointed Special Advocates of Southwest Missouri and $500,000 for Good Dads, according to past SBJ reporting.

Restricted funds in the budget totaled $441.3 million, which includes $30 million for a Springfield regional convention center. Voters in April rejected a tax to fund a downtown convention and events center. It was the second time in five months that voters said no to tax funding for the proposed facility.

The $30 million in restricted funding was reallocated from the 2026 fiscal year budget, and Kehoe told media he recognized a local convention center is an “important project for the community.” The city has not laid out next steps for a convention center following the April election defeat.

“I’m willing to work with local community leaders, including the mayor, Greene County commissioners, etc., on what that new path might look like,” he said. “That’s why we didn’t veto it.”

Kehoe noted the local match component for a convention center is still important for the funds to be released. City officials said after the April election that the $30 million in funding from the Spring Forward SGF sales tax approved by Springfield City Council for the center is still being held.