The first session of the 124^th Indiana General Assembly adjourned sine die in the early hours of Friday morning, with the House adjourning at 12:51 a.m. and the Senate at 1:38 a.m., bringing last-minute negotiations and policy frenzy to a close. This year’s legislative session was the most fraught in decades, with April’s uncooperative revenue forecast causing a shakeup with any bill that had a fiscal component, driving eleventh-hour decisions and changes. We will run down the budget and other significant issues that dominated the session below. This list is not comprehensive, but merely gives you a flavor of top issues dealt with at the Statehouse this year. Grab an espresso or two, because it is quite a read:

THE BUDGET

Fiscal leaders in the General Assembly knew that budget discussions were all but a formality until the April 16th meeting of the State Budget Committee, when the April revenue forecast revealed a $2.4 billion revenue gap to fund the State. This is important because the one requirement of the legislature, by statute, is to pass a balanced budget this session.

HEA 1001 appropriates money for state agencies, the delivery of government to Hoosiers, capital expenditures, K-12 and higher education, the delivery of Medicaid and the Healthy Indiana Plan, and various other distributions. The budget also extends the Legislative Services Agency's review, analysis, and evaluation of tax incentives through 2030. The $45 billion budget includes an increase in the cigarette tax, cigars, and vaping products—something the Indiana Chamber and health advocates have advocated for years. Also included in the budget are universal K-12 vouchers, which will be in force for the second fiscal year. Many decried the cuts to public health funding to $40 million per annum, down from $100 million, the axing of the Commissions on Women and Native Americans, the elimination of funding to Indiana Public Media, and the failure to fund the waitlists for both in-home care and childcare (CCDF) programs. The IndyStar’s Kayla Dwyer ran down the budget’s winners and losers here. The final version of HEA 1001 passed the House by a 66-27 vote and, a few minutes later, the Senate by a 40-9 vote in the early morning hours of April 25th.

EDUCATION & WORKFORCE

K-12 education reform was a predominant issue at the Statehouse with the removal of income eligibility requirements for the Choice Scholarship program, making private school vouchers available to all families for the second year of the budget. This move was praised by school choice advocates but denounced by public school supporters due to its potential of diverting funds from public schools amidst the $2.4 billion budget shortfall.

After months of debate on HEA 1002, the education deregulation bill, last-minute conference committee changes (which include never-before-discussed code repeals) earned extended debate on the Senate floor, with one Senator calling the effort “bull crap” thanks to its short timing between discussion and its narrow 27-21 vote.

SEA 146 raises the minimum teacher salary from $40,000 to $45,000 and requires school corporations to allocate at least 65% of state tuition support to teacher compensation. In a last minute change, the legislature stripped parental leave provisions in the bill. The measure also creates the Indiana Teacher Recruitment Program to provide grants to programs that train and recruit teachers in areas with critical teacher shortages. However, the grant was not funded, so the number of grants awarded, as well as their amounts, will be determined by the Indiana Department of Education (IDOE).

And changing the higher education landscape, buried in the budget, is the provision that disallows Indiana University alumni to elect trustees, uprooting more than a century of precedent. Indiana’s Governor will now have complete control over university appointees. Read more from Axios’ Arika Herron here. Also in the budget are tenure “reforms” which require "tenured faculty member productivity reviews," allowing the institution to address faculty members that are seen as failing to meet productivity requirements set by the institution's governing board.

In the session's final days, HEA 1515 was amended to include a new governing body called the Indianapolis Local Education Alliance (ILEA), a nine-person board tasked with assessing public school buildings in the Indianapolis Public Schools district boundaries. Earlier in the final week of the legislature, language was pulled from SEA 373. The board will determine how to manage all facilities within the boundaries — those belonging to IPS and those belonging to charter schools — under a new governing body and provide transportation to them. In an interesting twist, Indianapolis Mayor Joe Hogsett asked lawmakers to ensure ILEA is not subject to the state’s Open Door Law. Without the requirement, the ILEA can meet behind closed doors before they emerge with a plan by the end of the year, which will be voted upon in public. The alliance can choose to have public meetings throughout the months-long process

HEALTHCARE

Significant healthcare reform took up a lot of air in the room this session, however, some of the bills were significantly watered down - including Governor Braun’s priorities. SEA 118 aimed to provide more reporting and transparency for the 340B prescription drug program. The Indiana Capital Chronicle runs down the program, which requires drug manufacturers to sell discounted drugs to providers serving low-income and traditionally excluded populations. With purchases in the program reaching $66 billion since its inception in 2005, advocates have pointed to entities pocketing the savings, driving legislators to take action.

The state’s most significant driver in healthcare costs has been the exploding Medicaid enrollment in recent years. This year’s budget, HEA 1001, funded Medicaid at existing levels but failed to fund the waitlist for the program. While Medicaid enrollment shows signs of a plateau, the costs continue to increase due to Indiana’s expensive healthcare costs.

HEA 1004 sought to govern nonprofit hospital pricing. The House passed the bill by a 68-23 vote, and a few moments later, on sine die, the Senate voted 37-13, to rein in high hospital prices in Indiana. HEA 1004 was authored by Rep. Martin Carbaugh (R-Fort Wayne) to address hospital prices, but the bill’s scope was widened throughout the process to include other health care and insurance matters. The bill’s core pricing scrutiny targets hospital systems with $2 billion or more in net patient service revenue in the state, specifically Indiana University Health, Ascension St. Vincent, Community Health Network, Franciscan Health, and Parkview Health. HEA 1004 also calls for the Indiana Office of Management and Budget to study inpatient and outpatient hospital prices from 2023-2024 to determine statewide average prices, to be reported as a percentage of Medicare reimbursement. Then, each year starting June 30, 2027, the office will adjust the average price based on the medical Consumer Price Index. Starting in 2029, a hospital system will lose its state nonprofit status if its aggregate average prices were not equal to or less than the state average, although the system could re-establish nonprofit status by returning to compliance.

PROPERTY TAX REFORM

The legislature passed significant property tax reforms in SEA 1, aiming to provide relief to homeowners while balancing the financial needs of local governments. Proponents of the bill maintain that the legislation will save Hoosier taxpayers $1.4 billion over the next three years.​

The bill, signed into law by Governor Braun soon after passage, made huge changes to the business personal property tax – a tax paid annually on business equipment. Under current law, businesses with less than $80,000 total in equipment are exempt. However, SEA 1 raised that exemption to $1 million this year, and $2 million next year.

In an interesting twist of events, the Department of Local Government Finance bill (HEA 1427) included some trailer language to SEA 1 that would keep the exemption threshold the same this year, and go straight to $2 million next year. In addition, the trailer language walked back the exception to allow certain new depreciable personal property placed in service after Jan. 1 to avoid the 30% minimum depreciation floor, stating that “if property tax revenue that is attributable to the depreciable personal property is pledged as payment for bonds, leases, or other obligations.”

Supporters of the bill say​​they expect two-thirds of homeowners to pay a lower property tax bill in 2026 than they will this year. However, opponents say they expect most communities to increase income taxes come 2027, which could completely offset the property tax savings to homeowners.

CHILDCARE

As we stated earlier, the revenue forecast had a direct impact on many programs in the budget, causing budget cuts to popular programs– and childcare funding was no exception. As a result, the Child Care Development Fund (CCDF) ($147.25M/year), On My Way Pre-K ($39.4M/year), and the school-aged care grant ($771k/year), each took a roughly 5% cut from the Senate-passed version of the budget.

In addition, the income eligibility for new enrollees to On My Way Pre-K has shifted again– currently at 150% of the federal poverty level (FPL), the final budget went down to 135% FPL (which was higher than the Senate version of 127% FPL).

However, there were some childcare wins (that did not have a fiscal) to brighten the outlook with the inclusion of an extension of the employer tax credit and the creation of a new licensure category for childcare centers called multi-sites. There will always be more work to do on this issue, so keep your eyes open for more on this in future sessions.

ELECTIONS

Perhaps one of the session’s most controversial issues included making school board elections partisan. SEA 287 mandates that school board candidates state a party affiliation, identify as independent, or remain nonpartisan in general elections. This change has sparked debate over the politicization of local education governance. Despite pushback within the Senate majority caucus, local school officials, and good government advocates, the measure was narrowly passed in the last hours of the legislature by a vote of 26-24. SEA 10, which removes university identification cards from Indiana’s voter ID options, was signed into law in mid-April. Opponents maintained that voter turnout would decline further with the bill's passage.

WORKFORCE DEVELOPMENT

Governor Braun in his State of the State included the creation of an Office of Innovation and Entrepreneurship as one of his goals for his first term. SEA 516 created this office with the idea of streamlining existing programs across multiple state agencies to focus on assisting new and fledgling businesses in Indiana. This bill is awaiting signature from Governor Braun.

ENVIRONMENTAL AFFAIRS

It was a rather quiet year for environmental legislation, though the state continued its double down on no-more-stringent-than initiatives, this time with construction runoff and stormwater. HEA 1037, which prevents local action that’s more stringent than state or federal stormwater policy, passed in the final days of the session and remains on the Governor’s desk for further action.

ENERGY

The policies are now in place to bring small modular reactors (SMRs) to Indiana, with SEA 424 already signed by the Governor. The State has thrown its support behind SMR technology as part of its strategy to transition to cleaner, more resilient energy sources. These compact nuclear reactors offer a promising solution to meet the state's energy needs while reducing carbon emissions, but the tradeoff has earned concern from consumer advocates who decried ratepayer dollars being used to subsidize the technology—more from WFYI here.

NOW WE WATCH (AND CONSTANTLY REFRESH THE) GOVERNOR’S BILL WATCH

Now that the 2025 legislative session has adjourned for the year, Torchbearer Public Affairs will monitor further action the Governor takes on the hundreds of enrolled acts making their way to his desk. Once the bills hit the Governor’s desk, he has seven days to sign or veto the bill. If he does not sign the bill, it automatically becomes law on the eighth day after receipt. You can review the bill watch list here.

In the meantime, we await Legislative Council’s meeting in the coming weeks to determine topics of interim study committees. These will be topics to be studied more in-depth than what would normally occur during the pressure cooker of the legislative session. We will make sure to communicate with you these topics as we learn them.

Torchbearer Public Affairs would like to thank you for trusting us with your advocacy needs this year. We look forward to working with you in the interim (after we catch up on much-needed sleep!)