Kehoe’s budget proposal calls for flat funding for public schools, higher education

Grenita Lathan: Annual address provides starting point for district’s budget.

Lori Wilson: Tough budget decisions for Ozark schools may be required.

Richard “Biff” Williams: MSU has been proactive to be conservative in budgeting.

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Gov. Mike Kehoe’s plan to maintain stable funding levels for K-12 and higher education in fiscal year 2027 was met with relief by top local officials, who worried about cuts.

“We knew it would be a tough budget, so the governor is in a tough place. The fact that he held community colleges harmless without a cut, we were pleased because there are cuts in this budget,” said Hal Higdon, chancellor of Ozarks Technical Community College. “He chose to make sure we did not get hurt.”

Higdon said a flat funding proposal for K-12 and higher education is a win in a time of economic uncertainty.

Missouri public schools, colleges and universities were told not to expect any core funding increases next year during Kehoe’s second State of the State address. Level state funding may still require spending cuts if other revenue drops or expenses such as health care, retirement funds, fuel and utilities go up.

Kehoe’s proposed budget includes ongoing funding of nearly $4.3 billion for the K-12 state funding model or formula, which provides a basic level of state aid to districts, plus $361 million for student busing.

“We know how to plan and how to move ahead for the 2026-27 school year,” said Grenita Lathan, superintendent of Springfield Public Schools. “It helps us tremendously.”

K-12 and higher education institutions develop budgets in the spring that must be approved by June 30.

Planning beyond the following fiscal year is expected to be less certain. Kehoe created the Missouri School Funding Modernization Task Force to revamp the state funding model for K-12 public and private schools. A final report is due Dec. 1, which may trigger changes for the 2027-28 year.

In the annual address Jan. 13, Kehoe said consistent funding will provide districts with stability until changes can be made. He said the existing formula “simply does not work.”

“As we modernize opportunity and outcomes, we must also ensure our public education funding model reflects today’s realities and tomorrow’s responsibilities,” he said.

Ozark Superintendent Lori Wilson said a revised state funding model will create “winners and losers.” She said that likelihood, coupled with a push to lower property and income taxes in Missouri, has created uncertainty.

“We’re going to do the best we can with our salaries and keeping our teachers here and remain competitive, but we’re going to have to start looking at everything we do in the district,” Wilson said. “We just don’t know where the funding is going to go. I do not see it going up.”

Outside of core funding, Kehoe proposed bumping annual spending for the Missouri Empowerment Scholarship Accounts Program known as MOScholars to $60 million, an increase of $10 million. It helps lower-income families pay for private school.

“This program is working, and Missouri families are counting on it,” Kehoe said. “The students across our state have a brighter future because their families were given educational choice.”

Kehoe called for lawmakers to approve the perennial “open enrollment” legislation during the 2026 session, saying it is overdue. The details vary but, if approved, it will give public school students the right to attend the district they prefer.

He proposed $7.5 million in seed money to get started if the change, a form of school choice, becomes law.

Lathan said Kehoe’s overarching address focused on “innovate, improve and respond” and characterized it as heartening and in line with district goals.

She said several years of steady academic progress, expanded “choice” programs, and more career exploration and training through business partners and the Alliance for Healthcare Education are spot on with Kehoe’s priorities.

“We welcome the opportunity to continue to do that,” she said. “I’m hoping through the course of the next year, our governor will visit with us so we can show him open enrollment and choice in action.”

The open enrollment model employed by SPS allows eligible students to transfer to another school within the district if there is space.

Kehoe’s emphasis on agriculture was hailed by SPS, home to the AgAcademy and multiple Future Farmers of America, or FFA, chapters. Agriculture has also been a priority at Ozarks Tech and Missouri State University, which have grown programs in recent years.

“Key words I was listening for were innovation and meeting the workforce demand, which is part of our strategic plan, and agriculture,” said Richard “Biff” Williams, president of Missouri State. “We are invested heavily into agriculture. That is a place that we will really focus on as an institution.”

Kehoe’s budget proposal includes $1.2 billion for higher education and workforce development. It does not set aside funds for the MO Excels Workforce Initiative, which helps expand employer-driven education and training programs.

Williams said the governor made clear that funding will be limited.

“We were prepared. We were waiting for maybe a cut, and so we were quite pleased to know that will be flat in a tough budget year,” he said. “That demonstrates that the governor does value education and how it plays a role in economic development.”

Missouri State engaged in significant belt-tightening this fiscal year because of an expected shortfall.

“We’ve already made some tough decisions this year, in expectation of this,” he said.

Williams said the university will wait for projections to come into focus on enrollment, state and federal funding, and ongoing expenses before any decisions are made about tuition increases or spending cuts for next fiscal year.

“We’ve been very proactive in make sure that we’re conservative in our budgeting so we don’t have to make rash decisions,” he said. “We have that in place now. We just need to see what are the real numbers and where do we need to be.”