Governor Mike Kehoe today signed the Fiscal Year 2026 (FY26) state operating and capital improvement budget bills – which unfortunately incorporated a 42 percent reduction in State Transit Assistance funding.
Governor Kehoe’s action delivered a $50.8 billion budget, which included 208 vetoes totaling nearly $300 million in general revenue, and 32 expenditure restrictions totaling $211 million in general revenue. As part of his vetoes, Governor Kehoe reduced the Transit Operating Investment from $11.7 million to $6.7M, removing $5 million from General Revenue in HB4. This is a 42 percent reduction in revenues for transit operations from 2024.
The 2025 Missouri Legislative session wrapped on Friday, May 16 with a third year of sustained investment in transit recommended. HB4 which was approved in Conference Committee included $10 million in General Revenue plus $1.7 million from the State Transportation Fund for transit operations, a retention of the funding levels from 2023 and 2024, a 580 percent increase since 2021.
This was a roller coaster year for public transit funding, with the Governor recommending a cut of $5 million in his State of the State address in January. Then the House Budget Committee continued this recommendation along with a one-time appropriation of $1 million from General Revenue for a total of $7.7 million moving to the Senate. Senate Appropriations Chair Lincoln Hough worked to move the funding to a higher level with $20 million in General Revenue coming out of the Senate Appropriations Committee. In the end the conference committee came back to $10 million in General Revenue plus the $1.7 million from the State Transportation Fund.
“State investment is essential to maintaining transportation services in rural areas like Scott County, Missouri. Scott County Transit System provides approximately 16,512 one-way trips annually, covering 117,178 miles, primarily serving seniors, individuals with disabilities, and low-income residents. These individuals rely on transit for work, medical care, and basic needs. Funding cuts will result in reduced service hours, staffing, and trip availability, directly impacting vulnerable populations and limiting their access to essential services,” Latricia Bowden, Office Manager, Scott County Transit System, Inc.
State funding is absolutely crucial as it provides the non-federal or local match required to enable transit providers to draw down some of the $91 billion in federal funds earmarked for transit as part of the $1.2 trillion Infrastructure Investment and Jobs Act. Federal funding support requires a 50:50 match for transit operations and an 80:20 match for capital programming. Per capita spending has dropped from $1.89 to $1.08.
“The Governor’s action today with regard to State Transit operating assistance is a significant loss for Missouri,” stated Kimberly Cella, executive director for Citizens for Modern Transit and the Missouri Public Transit Association. “This is a direct loss for each of the 30 transit providers. It will also probits them from having the matching funds needed to bring additional federal dollars back to the state. Transit providers deliver nearly 40 million rides annually, providing critical access to jobs, healthcare and education in both rural and urban areas. They also contribute more than $4 billion annually to the state’s bottom line. It is imperative that Missouri residents – whether they ride transit or not – reach out to the Governor and their legislators about the negative impacts of this decision. Work begins now to get funding back on track in 2026.”
HB4 Veto Language is as noted below:
Section 4.535 I hereby veto $5,000,000 general revenue for distributing funds to urban, small urban, and rural transportation systems. In the FY 2026 budget approved by the General Assembly, nearly $775 million, including $297 million for the foundation formula, in new general revenue spending was added above what was included in our FY 2026 budget recommendation. Additionally, according to fiscal forecasts, the current trajectory of state-level spending and revenues projects a budget shortfall starting in FY 2027. A course correction in State finances is not only warranted but will be constitutionally required to achieve a balanced budget in future years and safeguard Missouri’s financial security and AAA bond rating moving forward. While this may be a worthwhile project, due to the aforementioned reasons, we must control new spending and cannot prudently justify this expenditure at this time.
This budget already includes $6,710,875, including $5,000,000 general revenue, for this program. From $10,000,000 to $5,000,000 from General Revenue Fund. From $11,710,875 to $6,710,875 in total for the section.
More information: https://governor.mo.gov/press-releases/archive/governor-kehoe-takes-action-fy26-state-operating-budget-bills