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The state’s revenue forecast revealed last week that Indiana’s projected revenue for the next budget cycle fell by a staggering $2.4 billion.
The Indiana General Assembly will have to determine where they plan to make these $2.4 billion in cuts and finalize the budget with less than one week until the April 29 deadline.
The General Assembly is one of 46 state legislatures that meets annually and one of the 16 states that uses a biennial budget, according to Dr. Elizabeth A. Bennion, the chancellor’s professor of political science and director of community engagement at Indiana University South Bend.
She explained to TheStatehouseFile.com that Indiana operates on a biennial budget, which means it covers a two-year period.
“Studies do not consistently document clear advantages of either an annual or biennial state budget. A good system of executive and legislative fiscal and program planning can work under either an annual or biennial budget,” Dr. Bennion said. “The success of a budget cycle seems to depend on the commitment of state officials to good implementation rather than on the length of the budget cycle.”
If a solution to the multi-billion dollar budget deficit cannot be reached within the next week, a special session may be called that will require lawmakers to m
over the summer.
In 2009, the Indiana General Assembly called a special session due to a $763 million deficit resulting from the Great Recession. Sen. Jim Buck, R-Kokomo was a legislator during this session but declined to comment on the current state of the legislature.
Rep. Gregory Porter, D-Indianapolis, believes that the budget will be finished by Friday but that “there are a lot of hours out there.
“People knew the 2009 recession was coming back thanks to Trump’s tariffs, but this is a reality shock,” Porter said. “Federal actions could completely change our trajectory. We’re one of the most intense manufacturing states in the nation, so we could get hit hard. When the U.S. gets a cold, Indiana gets pneumonia.”
Indiana is ranked eighth in the nation in manufacturing, bringing in approximately $104 billion to the state and employing over 500,000 Hoosiers.
In a press release,Rep. Jeffrey Thompson, R-Lizton, stated that, “Our latest revenue forecast shows economic growth, but at a slower pace than was expected last December.
“Indiana is in a strong position to overcome budget challenges because of our commitment to living within our means and maintaining prudent reserves,” Thompson said. “I will continue to work with my fellow lawmakers and the governor on how we can look at ways to run state government more efficiently while ensuring Hoosiers continue to receive the services they need.”
Bennion believes that potential cuts will include “non-essential government services, public safety, health care, and social services.”
“Stricter requirements to obtain government services, including Medicaid, is another approach the legislature is taking to cost cutting,” she said. “There is strong advocacy to protect funding for K-12 education, but any increases are unlikely to keep pace with the inflation rate, and higher education institutions are likely to see a flat budget and to see their capital expense budgets zeroed out for the next biennium.”
Rep. Philip GiaQuinta, D-Fort Wayne, claims that irresponsible spending over the last few years is what led to the deficit.
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“I don’t really see this as any sort of new news,” House minority leader GiaQuinta said. “I think a lot of us saw this coming months ago with the tariff issue, really with what President Trump was saying.
“Why don’t we get back to basics around here of funding public education?” he said. “Ninety-five-percent-plus of our students get a public education. Instead, we have almost a billion dollars now going to fund private schools.”
K-12 education is the largest expenditure in the state, taking up 47% of the budget.
GiaQuinta explained that he is “very concerned” about the shortfall in the budget and its potential to cause Hoosiers to lose services they are currently relying on.
“It’s unfortunate because I do think these types of things do need a really good study and vetting through committees, and now we’re at a week to go and it’s going to be difficult to get some of these things done,” he said.
The General Assembly is required to complete work no later than April 29, but many believe the session will end on Thursday.
The budget will go into effect on July 1, 2025.
