Indiana lawmakers passed the state budget over night. Here are the biggest winners and losers

Indianapolis Star

25-04-2025

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It was an unusually topsy-turvy road to get there, but Indiana lawmakers finally gave final approval to the next two-year state budget shortly after 1 a.m. Friday morning.
Just a week earlier, a dispiriting revenue forecast sent lawmakers back to the drawing board to find $2 billion to either cut or raise. They ended up finding a combination of both: a smattering of cuts to public health, higher education and public media, a little dip into reserves, and a hike in the cigarette tax.
And, within only the last two days of session, lawmakers inserted new and substantive policy language impacting state universities.
The House passed the budget 66-27; the Senate, 39-11. The bill is now heading to Gov. Mike Braun's desk ― his first budget as governor.
In a budget year that was already predicted to be tight, not many parties will feel like winners. But here's our list of who wins and loses in this 2026-27 budget.
Winners
Indiana Chamber and the American Cancer Society
They've been advocating to raise the cigarette tax for many sessions now, as a means of both raising revenue and discouraging smoking. They've gotten close a few times, with the House putting an increase in their budget proposal but the Senate rejecting it.
It took a $2 billion revenue shortfall, but they got it: lawmakers raised the cigarette tax by $2 a pack.
Wealthy private school attendees
Families of four with an annual income of $220,000 currently qualify for publicly funded vouchers to attend private schools. It was a goal of the House's to eliminate that income limit so wealthier Hoosiers can qualify; the compromise in the final budget is universal school choice kicking in starting with the 2026-27 school year, the second year of the budget.
Longterm care facilities
Since the state transitioned to a "managed care" system for seniors, where three large insurance companies coordinate care for each person needing at-home or facility-based care, those longterm care providers have had issues receiving timely reimbursements from those three companies.
Earlier on in session, a representative for longterm care providers (like nursing homes) said they had, collectively, $100 million in outstanding claims.
This budget gives those managed care entities 21 to 30 days to pay the facilities, depending on how the claim was filed, and institutes a late penalty of $500 per claim per day.
Transparency
There's been lots of chatter about Secretary of State Diego Morales' mystery-funded trips abroad.
Now, Morales, the governor, governor's cabinet and the other statewide elected officials ― comptroller, treasurer, attorney general and lieutenant governor ― will have to file annual reports to the state budget committee detailing where they've traveled, why and with what state funds.
Losers
Public media
The $7.4 million line item for Indiana's 17 public broadcasting TV and radio stations ― local NPR and PBS affiliates ― is now zero.
The state funding cut is on top of threats from the federal level to cut government funding. For some rural stations without deep individual donor pockets, state and federal funding can comprise almost half their budgets.
Local health departments
State lawmakers decided in 2023 to pump a historic investment of $225 million into county public health departments to do preventative health programming, like disease prevention and maternal health care.
This year, lawmakers were prepared to pump another $200 million into this initiative. But since the revenue forecast, they decided to scale it back to $80 million, less than half the original plan.
Secretary of State Diego Morales
In addition to needing to file travel reports, Morales will also have less control over certain funds.
There are a number of dedicated funds that the secretary of state's office administers ― pots of money that come from fines and fees ― that will now route through the General Assembly to decide how that money gets spent.
State universities
The latest version of the budget introduced new language asserting state control over multiple aspects of state universities' governance.
One section gives Gov. Mike Braun the power to appoint all nine members of the Indiana University board of trustees, and to replace any of them.
Another drastically redefines tenure at universities by subjecting tenured faculty to "productivity reviews" and probation, which could lead to firing, if they don't meet certain productivity benchmarks. Another makes faculty governance organizations "advisory" only. Yet another requires all faculty to post their syllabi online.
Women's and Native American commissions
The Indiana Commission for Women and the Native American Indian Affairs Commission, both of which had roughly $100,000 budgets, are gone entirely from this budget.
There's no word on whether that means the commissions themselves will be dissolved ― the governor's office has not responded to requests for comment on that question.
"I think it's done and I really resent it," Sen. Vaneta Becker, R-Evansville, said of the axing of the women's commission.
People on waitlists
More than 11,000 Hoosiers in need of home or community based care are on waitlists for the Medicaid waiver as a result of the $1 billion shortfall discovered in 2023.
In a separate issue also related to a dearth of funding, the Family and Social Services Administration has also brought back the waitlist for child care vouchers for low-income families.
This budget doesn't chip away at either of those waitlists. It does dedicate some money toward the child care vouchers to ensure that all families currently receiving vouchers will not be booted to the waitlist.
Tossup
Gov. Mike Braun
Braun gained some power in this budget over the state's flagship research school, Indiana University.
But a number of his tax credit suggestions didn't make the cut, including tax credits for capital investments in rural areas, employers who provide "upskilling" training for their workforce, and young farmers starting out in the business.
Win some, lose some.