MO school districts receive funding from the state formula, local property taxes, and sales tax revenues.
Out of MO DESE's total budget for FY 2025, nearly half came from General Revenue (GR). Federal and other earmarked sources provided an almost equal share.
Over two decades, earmarked sources have added to the K-12 education funding in MO. Federal or stabilization funds have covered shortfalls during recessions, and GR share of total education funding has remained constant.
MO school districts receive funding from local property taxes, the local School District Trust fund from sales and use taxes (Proposition C), and state dollars distributed through the foundation formula (Department of Elementary and Secondary Education (DESE) 2023).
The MO Department of Elementary and Secondary Education (DESE) approved budget includes funds from General Revenue (GR), federal funds, and other earmarked sources (MO House of Representatives 2024, Figure 1). Funds from earmarked sources for education include lottery, bingo, and gaming proceeds. In addition, revenue from the sale of cigarettes and other tobacco products is deposited in the State School Money Fund (RSMo 149). Tobacco settlement funds support early special education, Parents as Teachers, and childcare subsidies. Proposition C, passed by MO voters in 1982, added $0.01 statewide sales tax for K-12 education funding (DESE n.d.).
MO schools receive federal funding to support disadvantaged students, individuals with disabilities, and other federally funded programs (See Science Note (SN) Federal Education Funding).
In MO, the school funding formula sets a state and local funding target that reflects the spending levels of high-performing school districts meeting specific standards (DESE 2025a, RSMo 163.011, RSMo 163.031). The funding formula also allocates additional resources to support districts with low-income students, students with an individualized education program, and English language learners. For the 2025 fiscal year (FY 2025), DESE requested $3.8 billion for the foundation formula (DESE 2025b).
For FY 2025, MO appropriated $8.7 billion in federal, GR, and earmarked funds for DESE’s total budget, supporting the foundation formula, transportation, nutrition and food services, special education, and early childhood and career education, among other key programs (MO House of Representatives 2024). GR accounted for $3.99 billion (46%), earmarked sources $2.34 billion (27%), and federal funds $2.40 billion (27%).
In FY 2025, education funds from lottery, bingo, and gaming proceeds were about $900 million (MO House of Representatives 2024). Additionally, $34 million was allocated from the tobacco settlement funds to early special education, Parents as Teachers, and childcare subsidies. MO allocated $1.3 million from proposition C for DESE’s budget in 2025 (HB 002 2024).
GR funding for DESE’s budget has grown from about $2.5 billion in 2003 to $4 billion in FY 2025 (MO House of Representatives 2002-2024, Figure 1). This represents a 52% increase over 22 years, but its share of DESE's total budget fell from 56% in FY 2003 to 46% in FY 2025. (For more information on MO revenue see SN MO Revenue vs. Economic Trends).
Earmarked funds more than doubled between 2003 and 2025, rising from $1.1 billion in 2003 to $2.34 billion in 2025 (MO House of Representatives 2002-2024). Despite the growth in dollar amount, their share of total education funding has remained constant, ranging from 24% and 28% of the total budget (Figure 1).
Federal stabilization and emergency funds have added to the baseline education budget. From 2010 to 2012, the Budget Stabilization Fund covered shortfalls in GR during the recession (MO House of Representatives 2011, 2010, 2009). COVID-19 relief programs led to a temporary increase in the share of federal funds from FY 2021 to FY 2025 (MO House of Representatives 2024, 2023, 2022, 2021, 2020) Federal funds spiked to $4.6 billion in FY 2023 before receding to about $2.4 billion by 2025. In FY 2023, this federal money temporarily reduced GR and share of the education budget to 37% and 18% respectively. COVID-19 funds were set to expire in the 2024-2025 school year, but the U.S. Department of Education is currently reviewing extensions, and it is uncertain whether these funds will be appropriated (U.S. Department of Education 2025).
Figure 1. DESE’s approved budget by 2003-2025. DESE’s funding in billion dollars from 2003 to 2025 by funding source. General revenue consists of individual income tax, sales tax, corporate income and franchise tax, and other sources. Other earmarked sources include Proposition C and cigarette tax, and lottery and gaming proceeds. Budget stabilization funds correspond to federal stimulus funds from the American Recovery and Investment act of 2009. Data from MO House of Representatives 2003-2024.
References
Mo. Ann. Stat. § 163.011. https://revisor.mo.gov/main/OneSection.aspx?section=163.011.
Mo. Ann. Stat. § 163.031. https://revisor.mo.gov/main/OneSection.aspx?section=163.031.
MO Department of Elementary and Secondary Education (2023) School Budget. https://dese.mo.gov/media/pdf/school-budget.
MO Department of Elementary and Secondary Education (2024) Fiscal Year 2026 Program Descriptions. https://oa.mo.gov/sites/default/files/FY_2026_DESE_Gov_Rec_Programs_Book.pdf
MO Department of Elementary and Secondary Education (2025a) Missouri School Funding Formula. https://dese.mo.gov/media/pdf/missouri-school-funding-formula
MO Department of Elementary and Secondary Education (2025b) Fiscal Year 2025 budget request. https://dese.mo.gov/media/pdf/fiscal-year-2025-budget-report
MO House of Representatives (2024) 2024 Budget Fast Facts. Fiscal Year 2025. https://house.mo.gov/AppropriationNotes.aspx?fileid=465.
MO House of Representatives (2023) 2023 Budget Fast Facts. Fiscal Year 2024. https://house.mo.gov/AppropriationNotes.aspx?fileid=391.
MO House of Representatives (2022) 2022 Budget Fast Facts. Fiscal Year 2023. https://house.mo.gov/AppropriationNotes.aspx?fileid=337.
MO House of Representatives (2021) 2021 Budget Fast Facts. Fiscal Year 2022. https://house.mo.gov/AppropriationNotes.aspx?fileid=309.
MO House of Representatives (2020) 2020 Budget Fast Facts. Fiscal Year 2021. https://house.mo.gov/AppropriationNotes.aspx?fileid=288.
MO House of Representatives (2011) 2011 Budget Fast Facts. Fiscal Year 2012. https://house.mo.gov/AppropriationNotes.aspx?fileid=153.
MO House of Representatives (2010) 2010 Budget Fast Facts. Fiscal Year 2011. https://house.mo.gov/AppropriationNotes.aspx?fileid=154.
MO House of Representatives (2009) 2009 Budget Fast Facts. Fiscal Year 2010. https://house.mo.gov/AppropriationNotes.aspx?fileid=155 .
MO House of Representatives (2002-2024) Budget Fast Facts. https://house.mo.gov/Budget.aspx
