Key Takeaways
- • Missouri voters rejected Amendment 7 on Tuesday, turning down a proposal to create the Show-Me Prosperity Fund, a permanent public endowment overseen by the state treasurer, according to the Missouri Independent.
- • The fund would have been invested in exchange-traded funds tracking the S&P 500, with withdrawals barred until the treasurer and lawmakers determined that earnings could replace state tax revenue.
- • Sponsor Republican state Sen. Adam Schnelting estimated that an initial $250 million investment could grow large enough in 125 years to cover state expenses, assuming sufficient returns.
- • The measure had no major funded campaign backing it, and Missouri faces declining revenues and pressure to cut spending, which critics cited as reasons to question the proposal.
Summary
Missouri voters rejected Amendment 7 on Tuesday, a ballot measure that would have created the Show-Me Prosperity Fund, a permanent public endowment overseen by the state treasurer. Supporters hoped the fund could eventually generate enough investment earnings to eliminate state taxes. Lawmakers could have invested state money in the fund, allowing returns to compound over generations until they were sufficient to replace revenue from state taxes.
The proposal was sponsored by Republican state Sen. Adam Schnelting of St. Charles, who said the idea was inspired by investment accounts he created for his children. His legislative staff estimated that an initial investment of $250 million could grow large enough in 125 years to cover the state's expenses, assuming sufficient investment returns over that period. Under the proposal, the fund's assets would have been invested in exchange-traded funds tracking the S&P 500, and withdrawals would have been prohibited until the state treasurer determined that earnings could replace state tax revenue and lawmakers approved that determination.
The measure received support from all but eight Republicans in the legislature, while Democrats opposed it. Critics, including Democratic state Sen. Maggie Nurrenbern of Kansas City, questioned whether Missouri could afford to set aside money for a fund that could not be used for state services for decades. Nurrenbern said during Senate debate that the state does not have much general revenue left on the bottom line this year, and even less next year. Schnelting acknowledged that the state's finances could make an initial investment difficult, but argued that lawmakers could find budget savings or leave the framework in place until finances improved.
Unlike other high-profile ballot measures proposed by the General Assembly, Amendment 7 had no major funded campaign promoting its passage, according to the Independent. Schnelting told the outlet in September that the measure had no donors, think tank or lobbyist behind it.
The proposal differed from existing state funds. Texas' Permanent School Fund invests revenue from land sales and oil royalties to support public education, and the Alaska Permanent Fund uses oil and mineral revenues to help pay for government services and distributes earnings to residents through annual dividends. Missouri's proposal would have relied on money lawmakers chose to appropriate, along with donations and other contributions.
The proposal was sponsored by Republican state Sen. Adam Schnelting of St. Charles, who said the idea was inspired by investment accounts he created for his children. His legislative staff estimated that an initial investment of $250 million could grow large enough in 125 years to cover the state's expenses, assuming sufficient investment returns over that period. Under the proposal, the fund's assets would have been invested in exchange-traded funds tracking the S&P 500, and withdrawals would have been prohibited until the state treasurer determined that earnings could replace state tax revenue and lawmakers approved that determination.
The measure received support from all but eight Republicans in the legislature, while Democrats opposed it. Critics, including Democratic state Sen. Maggie Nurrenbern of Kansas City, questioned whether Missouri could afford to set aside money for a fund that could not be used for state services for decades. Nurrenbern said during Senate debate that the state does not have much general revenue left on the bottom line this year, and even less next year. Schnelting acknowledged that the state's finances could make an initial investment difficult, but argued that lawmakers could find budget savings or leave the framework in place until finances improved.
Unlike other high-profile ballot measures proposed by the General Assembly, Amendment 7 had no major funded campaign promoting its passage, according to the Independent. Schnelting told the outlet in September that the measure had no donors, think tank or lobbyist behind it.
The proposal differed from existing state funds. Texas' Permanent School Fund invests revenue from land sales and oil royalties to support public education, and the Alaska Permanent Fund uses oil and mineral revenues to help pay for government services and distributes earnings to residents through annual dividends. Missouri's proposal would have relied on money lawmakers chose to appropriate, along with donations and other contributions.
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