Indiana’s $44 billion two-year budget was approved late Thursday night by both chambers of the legislature as Democrats voiced their frustration with multiple last-minute additions, including giving the governor power over all Indiana University board of trustees appointments and decreasing funding for public health.
Last week, legislators received a forecast that projected a $2 billion shortfall for the next budget cycle and an additional $400 million less available in the current budget cycle.
Rep. Jeff Thompson, one of the budget architects, said the budget was adjusted to ensure the state “lives within our means.” House Bill 1001, the budget bill, includes a $2 per pack increase in the cigarette tax, which is “really important for the long-term sustainability of the state fiscally,” he said.
Most state agencies will see a 5% cut to their budgets, Thompson, R-Lizton, said, excluding public safety, mental health, Medicaid and K-12 education. Over the biennium, K-12 education will see an increase of $640 million and universal school choice will begin in the budget’s second year, Thompson said.
“It’s a budget of freedom. It prioritizes and spends on our priorities,” Thompson said. “We’re investing in the future because those things in education are going to effect in the next century. Likewise, the tobacco changes and smoking, that’s going to affect health for our Hoosiers in the next century.”
Sen. Ryan Mishler, R-Mishawaka, one of the budget architects, said “despite the concerning” revenue forecast, the legislature was able to balance the budget, which fully funds K-12 education and receives a 2% increase in 2026 and 2027 and gets Medicaid spending “under control.”
“Thanks to our fiscally conservative approach in previous years, Indiana is still in a stable position, but we need to tighten our belt and remain cautious with the changes in the economy. I will continue to work toward finding ways to increase efficiency and transparency during the next biennium,” Mishler said.
Gov. Mike Braun issued a statement after the session ended to thank the legislature for advancing priorities of his freedom and opportunity agenda.
“Despite the challenges posed by economic uncertainty, we embraced an entrepreneurial spirit, tightened the belts of state government, and passed a responsible biennial budget that will keep Indiana among the top states in the nation to raise a family and start a business,” Braun said.
Within the budget, Braun will be able to appoint all nine members of the Indiana University board of trustees, and at any time he can remove and replace any trustee who was elected by the alumni of Indiana University, which currently has three members voted on by alumni.
State Rep. Matt Pierce, D-Bloomington, asked Thompson if the provision to end alumni elections of Indiana University board of trustees members and to allow the governor to make the appointments was discussed either as a bill or amendment in either chamber of the legislature.
The provision wasn’t discussed by the legislature, Thompson said, and it was “discussed by several people.” When asked to go into greater detail, Thompson couldn’t recall who discussed the provision.
Thompson said the move was to align the Indiana University trustees selection process with other higher education institutions in the state. Pierce pointed to a state statute where Purdue University alumni elect three trustees.
“Why did members of this body not have the courage to admit to the public what they planned to do and offer the proposal in one of the committees, on the floor of this House, openly in a conference committee and allow the public to have a say,” Pierce said.
State Rep. Mitch Gore, D-Indianapolis, said the Indiana University board of trustees provision ends a century and a half democratic process of alumni electing some of the university’s board of trustees.
“It is about power, and it is about control,” Gore said. “It’s about the slow, calculated erosion of academic independence in Indiana.”
In recent years, the Republicans in the statehouse warned about the silencing of conservative voices on college campuses, Gore said. By giving the power to elect university trustees to a political official, the effect is the same, he said.
“What you claim to fear, you now seek to impose,” Gore said. “(The provision) concentrates power instead of dispersing it. It silences stakeholders instead of engaging them. It replaces deliberation with decree.”
House Speaker Todd Huston, R-Fishers, said he had “no problem” with the governor appointing the Indiana University trustees.
“House Bill 1001 builds on the success of what’s taken place in Indiana,” Huston said. “When we see a challenge, and we get a challenge, we meet it and we excel through it.”
The budget further:
- Decreases funding to public health from $100 million to $40 million
- Reduces eligibility for On My Way Pre-K and the Child Care Development Fund
- Public schools receive a 2% increase, while virtual charter schools revere 85% funding
- Decreases higher education funding by 5%
- Defunds public broadcasting
- Removes the prohibition on prior authorization for mental health drugs
- Maintains current salary levels for legislators
- Give the state administration control over the usage of the Beth Bowen Medication Room in the state capitol building.
Rep. Greg Porter, D-Indianapolis, said decreasing public health funding was ironic after U.S. Health and Human Services Secretary Robert F. Kennedy and the administrator for the Centers for Medicare and Medicaid Services Dr. Mehmet Oz recently came to the state to tout a Make Indiana Healthy Again plan.
State Rep. Mike Andrade, D-Munster, said the Make Indiana Healthy Again campaign and the public health funding don’t align.
“It’s hard to take public health promises seriously when we’re cutting the very programs meant to support them,” Andrade said. “We cannot claim to be making Indiana healthy again while gutting the support systems people rely on.”
The budget ensures a healthy Indiana by increasing the cigarette tax, which will improve Hoosier health “far more than any government program,” Huston said.
Andrade said he was disappointed the budget included “the continued lack of investment in pre-K programs” and “steady divestment” in Indiana’s higher education institutions.
“Hoosiers deserve a budget that reflects our values and priorities — and this one falls short,” Andrade said. “We’re underfunding public health, failing to support our youngest learners and defunding our higher education institutions. That’s not a path to prosperity — it’s a path to falling behind.”
Sen. Rodney Pol, D-Chesterton, said he was disappointed the budget cut funding to public broadcasting, especially as legislators are often interviewed by public broadcasting journalists about what is taking place during the session.
“Public broadcasting allowed us to speak directly to Hoosiers, informing them of what is important to us, informing them of what is happening in this building and informing them of what’s happening on a platform that is nonpartisan,” Pol said.
While the budget had some highlights, like a legislative study into the Department of Child Services’ workload, Pol said he couldn’t support the budget because of its cuts to special education funding, school voucher program and “chronic underfunding” of public schools.
“What we have before us is a bill that prioritizes subsidizing private education for the wealthy over education for the most vulnerable. Tax breaks to businesses while working Hoosiers get what amounts to essentially spare change,” Pol said.
State Rep. Earl Harris, D-East Chicago, echoed his Democratic colleagues’ concerns with education and public health funding cuts. Harris said it was “odd” that the budget stripped funding from public broadcasting services, which keeps Hoosiers informed about what is going on in their local communities and champions early education.
“An informed electorate helps create a stronger state and a government more representative of the people it serves,” Harris said. “House Bill 1001 is fiscally irresponsible and will harm Lake County and Hoosiers throughout the state.”
State Rep. Vernon Smith, D-Gary, said the budget doesn’t adequately fund education, as it puts Gary Community School Corporation in the “difficult position” of educating an additional 400 students while the budget projects the district will lose students.
“If we continue to grow, we’ll still get the money, but this inaccurate prediction proves that this budget is hastily done and far from what our communities deserve,” Smith, D-Gary, said. “Our schools will have just enough to stay afloat, but they won’t have the funding they need to thrive. Like always with the state legislature, Gary will get little.”
The House passed the budget in a 66-27 vote, with State Rep. Wendy Dant Chesser, D-Jeffersonville, the only Democrat to vote in favor of the bill. State Representatives Michelle Davis, R-Whiteland, and Craig Haggard, R-Mooresville, whose districts neighbor each other, were the only two Republicans to vote against the bill.
Huston, who rarely casts a vote, voted in favor of the budget.
The Senate passed the budget in a 39-11 vote, with Sen. David Niezgodski, D-South Bend, the only Democrat voting in favor of the bill. Republican Senators Michael Young, R-Indianapolis, and Jean Leising, R-Oldenburg, voted with the remaining nine Democrats against the bill.
Niezgodski said in a statement he supported the budget because of its impacts on his district, including funding for the Midwest Continental Divide Commission, South Shore Line completion, and a future Innovation Development District for South Bend.
Following the budgetary votes, each chamber adjourned sine die, which brought the 2025 legislative session to a close.
