This joint resolution would add Section 15(a) to Article IV of the Missouri Constitution to establish the "Show‑Me Prosperity Fund," a permanent public endowment inside the state treasury. The fund would be seeded by legislative appropriations and may accept gifts, donations, grants, and bequests; the state treasurer would invest it under a total‑return strategy aimed at preserving purchasing power.
The amendment ties future withdrawals to an explicit trigger and spending limits so that earnings could be appropriated to eliminate specified state taxes—starting with individual income, state sales and use, and corporate income taxes—only after the treasurer certifies that annual net investment earnings are sufficient. The package introduces new fiscal tools and governance requirements (audits, public reporting) while leaving key choices—seed funding, tax priority order, and investment governance—to later lawmaking, raising immediate questions for state budget officials and investment managers.
At a Glance
What It Does
Creates a constitutionally protected fund in the state treasury to be invested for total return and preserved as a permanent endowment. The fund’s earnings can be appropriated to eliminate enumerated state taxes only after a certification process by the state treasurer and approval by the general assembly, and annual withdrawals are capped at 2% of the fund’s five‑year average market value.
Who It Affects
Directly affects the state treasurer (investment and certification duties), the Missouri General Assembly (appropriations and concurrent‑resolution approval), and the Office of the State Auditor (periodic audits). Indirectly it affects taxpayers (potential elimination of major state taxes), state agencies that rely on those revenues, and the asset managers who will run the fund.
Why It Matters
This would be Missouri’s first constitutional sovereign wealth fund and would create a mechanism to replace broad‑based state revenue with investment earnings, shifting long‑term fiscal reliance from taxes to markets. That change alters budget risk, requires new investment and reporting infrastructure, and may lock important policy choices into the constitution while leaving implementation details to statute.
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What This Bill Actually Does
The amendment puts a permanent fund into the Missouri Constitution called the Show‑Me Prosperity Fund and defines its basic makeup: money the legislature appropriates plus any gifts, grants, or bequests the fund receives. The treasurer must manage the fund using a total‑return approach — meaning the investment strategy will consider income, capital gains, and long‑term purchasing power rather than focusing only on current income.
The constitutional text does not create a separate governing board or spell out asset classes, risk limits, or an investment policy beyond requiring fiduciary standards applicable to public trust funds.
Access to the fund’s earnings is tightly framed. Before any appropriation can be made to replace taxes, the state treasurer must notify the General Assembly that the fund’s net investment earnings in the previous fiscal year are sufficient to replace the revenue produced by all taxes listed in the measure; after that notification the legislature must approve the appropriation through a concurrent resolution within the first sixty calendar days of the regular session that immediately follows.
The amendment also constrains annual withdrawals: the amount appropriated in any fiscal year cannot exceed two percent of the fund’s average market value measured over the preceding five fiscal years.The constitutional language assigns protections and oversight: principal is constitutionally off‑limits — it cannot be appropriated, pledged, borrowed against, or otherwise encumbered — and the state auditor must audit the fund at least once every three fiscal years (more often at the auditor’s discretion). The fund’s balance and performance must be posted at least quarterly on a free, existing internet database created by law or executive order.
If the fund cannot meet obligations, the General Assembly explicitly retains the power to raise revenue or appropriate other funds to keep state programs running. Once the amendment’s enumerated taxes are fully eliminated, the legislature may use net investment earnings to replace federal funds, pay dividends to residents, or both.
The Five Things You Need to Know
The fund may be tapped to replace state taxes only after the state treasurer certifies that the fund’s net investment earnings in the previous fiscal year are sufficient to replace those tax revenues.
Any appropriation to use earnings for tax replacement requires the General Assembly to adopt a concurrent resolution within the first 60 calendar days of the regular session following the treasurer’s notification.
Annual appropriations from the fund are capped at 2% of the fund’s average market value over the prior five fiscal years.
The constitutional text prohibits appropriating, pledging, borrowing against, or otherwise encumbering the fund’s principal.
The state auditor must audit the fund at least once every three fiscal years, and the fund’s balance and performance must be published no less than quarterly on a free public internet database.
Section-by-Section Breakdown
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Creation, name, and funding sources
This subsection constitutionalizes the Show‑Me Prosperity Fund as a permanent public endowment inside the state treasury and lists permissible initial and ongoing sources: legislative appropriations and any gifts, donations, grants, or bequests. Practically, this means fund growth depends on appropriation decisions and voluntary receipts; the constitution does not mandate a revenue stream (for example, natural resource royalties) nor require an initial capitalization level.
Investment standard and payout trigger
The treasurer must manage the fund under a total‑return strategy that balances income, capital appreciation, and long‑term purchasing power, and must apply fiduciary standards for public trust funds. Withdrawals to eliminate taxes require a two‑step mechanism: the treasurer must notify the General Assembly that net investment earnings in the previous fiscal year are sufficient to replace specified tax revenues, and then the legislature must act by concurrent resolution within the first 60 calendar days of the next regular session to permit an appropriation.
Permitted uses, ordering, and annual cap
Appropriated moneys may be used solely to eliminate enumerated state taxes—explicitly individual income, state sales and use, and state corporate income taxes—with any additional state taxes phased out in an order determined by statute. The amendment also imposes an annual cap on withdrawals: no more than 2% of the fund’s average market value over the preceding five fiscal years can be appropriated in a fiscal year. Separately, the legislature retains authority to raise revenue by other means if the fund cannot meet obligations.
Post‑elimination uses and principal protection with audits
Once the enumerated taxes are eliminated, the General Assembly may direct net investment earnings to replace federal funding to the state, pay dividends to residents, or both. The constitution protects the fund’s principal from appropriation, pledging, borrowing, or encumbrance and requires the state auditor to audit the fund at least once every three fiscal years to verify compliance with the section.
Transparency requirement
The amendment obligates publication of the fund’s balance and investment performance at least quarterly on an existing free internet‑based database created by law or executive order for tracking state and local financial information. The requirement creates a minimum public reporting cadence but leaves the technical implementation (what platform, specific metrics, format) to statute or executive action.
Definitions and ballot language
The measure defines 'individual income tax' to include taxes on individuals, estates, trusts, and fiduciaries and defines 'net investment earnings' as income, gains, and appreciation net of management fees and expenses. The joint resolution also supplies the official ballot summary asking voters to create a permanent endowment intended to make the state 'financially independent' and 'eventually replace state‑imposed taxes.'
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Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Future taxpayers if the fund reaches sufficient size: the amendment contemplates elimination of the individual income, state sales/use, and corporate income taxes, which would directly lower tax liabilities for residents and businesses if the fund’s earnings replace those revenues.
- State budget planners and fiscal policymakers: a large, well‑managed endowment could provide an alternative revenue source and a tool for long‑term fiscal smoothing if governance and payout rules function as intended.
- Private asset managers and financial advisors: the fund’s creation will generate demand for professional investment management, custody, and advisory services if the General Assembly hires external managers or establishes a hybrid governance structure.
Who Bears the Cost
- Missouri taxpayers if the fund underperforms or is drawn down: the amendment preserves the General Assembly’s power to appropriate other revenues or increase taxes when the fund fails to meet expectations, which could shift costs back onto taxpayers.
- The state treasurer’s office: the treasurer assumes new fiduciary responsibilities, operational duties, and public reporting requirements, likely requiring expanded staff, new investment expertise, and higher administrative budgets.
- State programs reliant on current tax revenues: if legislators prioritize tax elimination even as the fund’s earnings fluctuate, program funding could become more vulnerable, forcing cuts or substitution with other revenue sources.
Key Issues
The Core Tension
The central dilemma is between two legitimate objectives: achieving political and taxpayer goals of eliminating major state taxes by relying on investment earnings, versus preserving stable, predictable revenue to fund government programs and protecting the fund’s principal from being eroded by market volatility or political pressure. The amendment offers strong nominal protections for principal and constrained withdrawal rules, but it also depends on future legislative choices and market outcomes—so it trades immediate policy ambition for long‑term fiscal and governance risk.
The amendment creates a high‑stakes linkage between market returns and the state’s ability to eliminate broad‑based revenue sources. It requires the treasurer to certify that a single prior fiscal year’s net investment earnings are sufficient to replace all enumerated tax revenues before withdrawals may be authorized; that single‑year trigger is unusually stringent and raises practical questions about timing, volatility, and the calculation method for 'sufficient' replacement.
The five‑year averaging rule for the 2% cap mitigates year‑to‑year swings in withdrawal size, but a 2% real‑withdrawal ceiling is modest relative to typical sovereign wealth fund spending rules and will likely limit near‑term capacity to replace large revenue streams without very large principal balances.
The amendment leaves significant implementation choices to statute: it does not establish an independent investment board, specify risk tolerance or asset allocation, require a reserve or rainy‑day buffer, or set a detailed distribution mechanism for tax elimination ordering. Those omissions concentrate power in future legislative and executive decisions and create ambiguity about who sets the fund’s strategic policy and how conflicts of interest will be managed.
The constitutional protection of principal is strong on paper, but enforcement will depend on audit practice, transparency implementation, and political will — especially if pressures arise to use the fund for short‑term political goals or to backfill budget holes. Finally, the ballot summary frames the fund as making the state 'financially independent,' but the amendment explicitly preserves the legislature’s power to re‑tax and appropriate other sources if the fund underperforms, underscoring that the change is not self‑executing and will require sustained fiscal discipline.
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