Lawmakers ended the 2025 session early Friday morning by passing a new state budget that Republicans say takes care of Indiana’s priorities — and Democrats argue moves the state backward.
Legislators were faced with a $2 billion revenue shortfall in the new budget. They filled it with a $2 per pack cigarette tax hike, major cuts to higher education and public health, and defunding things like public broadcasting and trails.
House Speaker Todd Huston (R-Fishers) said the budget makes important investments in key priorities, including K-12 education, housing and public safety.
“House Bill 1001 builds on the success of what’s taken place in Indiana,” Huston said.
But Rep. Robin Shackleford (D-Indianapolis) said Republicans’ priorities are misaligned.
“The state claims fiscal responsibility, but it is doing so at the expense of public health — which will lead to higher long-term costs,” Shackleford said.
Health First Indiana, the local public health funding program, was budgeted for $150 million this year. The new state budget reduces that funding to $40 million per year.
Huston said $40 million is about how much local communities have spent so far this fiscal year.
“I’d also note this: Rhere is no program that’s going to be better than raising the tobacco taxes, to diminish people from using those types of products and helping Indiana be healthier,” Huston said.
House budget architect Rep. Jeff Thompson (R-Lizton) said between 2 percent per year increases in K-12 funding and raising tobacco taxes, Indiana will be impacted far beyond the budget’s two years.
“It looks ahead into the next century,” Thompson said. “It does.”
Despite lawmakers' attempts to spare education funding, some say those efforts are still not enough.
Some lawmakers said the allocations for textbook reimbursement fees could eat up more of those increases than expected. The textbook fees are included as part of K-12 tuition support. Republican leaders said the reimbursement is in addition to the 2 percent average increase. Some Democrats said the reimbursement in the budget didn't cover the costs of textbooks for school districts.
The new budget also removes the income cap on Indiana's school voucher program during the 2026-2027 fiscal year — a move lawmakers estimate could cost around $93 million its first year.
Rep. Ed DeLaney (D-Indianapolis) said lawmakers missed the mark by expanding the voucher program.
"We do very little for education in this particular budget, and if you look at the math, the amounts given to the voucher schools are totally disproportionate,” he said.
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Democrats did applaud some parts of the budget, including significant funding cuts for the Indiana Economic Development Corporation, coupled with greater required transparency from the agency.
“More oversight? Amen,” DeLaney said.
But no part of the budget received more outcry than language inserted into it at the end of session — provisions that give Gov. Mike Braun full control over the Indiana University Board of Trustees; neuter faculty governance organizations at Indiana public colleges and universities; and require higher education faculty to undergo “productivity reviews.”
Rep. Matt Pierce (D-Bloomington) said faculty are under attack from the Republican supermajority.
“The best faculty … the people who are going to solve the challenges of our day with science and investigation and inquiry — they’re out of here,” Pierce said. “They’re not going to put up with this.”
Huston defended those provisions, which had never been offered or discussed at any point during session. He said it will help universities become more efficient to help them deal with the 5 percent funding they receive in the budget.
“Is really asking for a review after five years that bad?” Huston said. “Is it really bad to say if a program doesn’t have kids in it, maybe we shouldn’t continue to do it?”
The House and Senate passed the budget largely along party lines, with a single Democrat in each chamber voting in favor.
Indiana Public Broadcasting is a collaboration of Indiana Public Broadcasting Stations, which was defunded in the state budget.
Brandon is our Statehouse bureau chief. Contact him at bsmith@ipbs.org or follow him on Twitter at @brandonjsmith5. Kirsten is our education reporter. Contact her at kadair@wfyi.org or follow her on Twitter at @kirsten_adair.