Indiana’s “historic” public health funding was scaled back in the final version of the state budget — going from $100 million to just $40 million for all 92 counties. One expert said public health programs take years to build and this decrease could stall important progress.
The last state budget included $225 million for local health departments through the Health First Indiana initiative.
This session, lawmakers had $2 billion less than they originally thought for the next state budget, so the public health funding wasn’t the only thing scaled back or cut entirely.
Brian Dixon serves as the Regenstrief Institute's public health informatics director. He said local health departments won’t feel the effects until next year, but officials will have to start making decisions now.
“One of the challenges that we face is that several health departments were spent the last year and a half sort of gearing up to move forward with a number of programs at the local level,” Dixon said. “The decrease in funding means that they have to sort of scramble now to figure out how they're going to reduce the services that they had planned for 2026.”
Local health departments choose whether they want to participate in the Health First Indiana Initiative. All but six Indiana counties shared $75 million in 2024. In 2025, every county joined the program, sharing a total of $150 million.
The $40 million in the next state budget accounts for both 2026 and 2027. If all Indiana counties continue to opt in, it will be split among all 92.
Dixon said a substantial decrease in funding like this could mean local health departments would have to prioritize essential functions like infectious disease management over things departments have been trying to do for years like addressing understaffing. Many of the smaller health departments utilized the funding to bring on interns or to bring people on board to build relationships with community programs, which Dixon said will likely have to be scaled back to account for the loss of funding.
He also said it’s going to be hard to bridge the gap in funding with other resources.
“There's going to be less available from not-for-profit community groups, from federal funds, from other state programs, from potentially even corporations in the community that previously offered to bring some in-kind resources to support these programs,” Dixon said. “What's going to continue to be challenging is to find ways for public health to bring together the community partnerships that it has always facilitated to address these problems when there are not enough individuals at the health department and/or not enough resources in the broader community to support the aims of these initiatives.”
Some lawmakers raised concerns during session that the funding wasn’t producing the results they expected.
Local health departments already have their funding for 2025, so Dixon said they can still make progress toward their goals this year. However, he said many departments launched programs expecting to invest in them long term.
In public health, Dixon said to address issues like maternal mortality, diabetes and lower tobacco use take time — usually a lot of it. He said local health departments have been excited to work on these issues with the funds the Health First Initiative provided.
“But they take four, five, eight, you know, nine years before they show dramatic reduction in rates of these chronic diseases and other conditions at the local level,” Dixon said.
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Dixon said people who expect results within 18 months overestimate how effective these programs can be. He said progress will likely be stalled due to the decrease in funding that will affect departments starting in 2026.
“We fully expect that one of the challenges will be, you know, what progress could be made at a lower level of funding?” Dixon said. “Well, you're going to have slower progress and maybe not so much progress across many of the metrics, given the new reality that these health departments face.”
Public health funding has a solid return on investment, said Dixon. At the local level, he said there’s typically a $4 return for every one $1 spent, with the return going to a variety of parties within the health care system.
For patients, Dixon said public health saves them money because they don’t have to go into doctors or hospitals for health care. He said there’s also health care savings for hospitals, providers and programs like Medicaid when public health funding is spent on patients that are uninsured or underinsured. He said that savings does end up making it back to the state in many ways.
“There's benefits across the board for these public health interventions, and what these interventions try to do is they try to essentially increase people's awareness of their health,” Dixon said.
READ MORE: Report: Indiana local public health funding program generates significant savings
By helping people be aware of their health and any issues, Dixon said public health interventions for chronic disease help prevent more costly care in the future. He also said investing in public health helps strengthen the response to crisis situations like pandemics.
Dixon said lawmakers were in a tough position due to the $2 billion budget shortfall. However, when Indiana has more room in the state budget, he said he hopes they come back and invest back into this program.
“We were one of the states in the U.S. that funded public health at the lowest level in the country, like we were 48th or 49th out of 50 — and then this program boosted us up,” Dixon said. “We’re now sort of middle of the pack in terms of our funding for public health.”
Dixon said ensuring Indiana gets back to meaningful investments in public health is critical to avoid sliding back. He said that funding plays an important role in addressing Indiana’s poor health outcomes.
“If there's any way, as we move forward, if there's less lean times ahead, hopefully these types of programs would be on the priority list for receiving additional funding so that we can make progress on making Indiana healthier,” Dixon said.
Dixon said local health departments will likely have to work with the state to set realistic expectations given the new budget restrictions they will have in 2026 and 2027. He said the previous performance metrics and indicators may not be fair measures of success under the new conditions.
Abigail is our health reporter. Contact them at aruhman@wboi.org.