(Statehouse) – Indiana lawmakers wrapped up the 2025 session after midnight Friday, approving a two-year state budget worth $45 billion.
The budget, House Enrolled Act 1001, remains about the same size as the last one, even though the state now expects to bring in $2.4 billion less over the next two years.
To help make up the difference, lawmakers more than doubled the cigarette tax, raising it to $2 per pack. They also increased taxes on cigars, vape cartridges, and other tobacco products — a move expected to bring in around $800 million and reduce smoking.
Lawmakers also made spending cuts. Public health, colleges, public broadcasting, and the Indiana Economic Development Corporation will all get less money. Public health funding drops from $150 million in 2025 to $40 million a year after that. Colleges lose about 5% of their funding.
Some areas were protected from cuts. K-12 education will still get a 2% funding increase each year. Medicaid, child services, the Department of Correction, and teacher pensions will continue to be fully funded. Lawmakers also kept the plan to expand school vouchers in 2026.
The final budget was introduced Wednesday and quickly passed Thursday night. Democrats said they had little time to review it and pushed back on last-minute changes made without public input.
One change gives the governor full control of IU’s Board of Trustees, removing alumni elections. It also makes faculty groups advisory only and adds reviews for tenured professors — none of which were in earlier versions.
The budget adds a new tax on nonprofit hospitals with high facility fees — starting at 33% next year and rising to 100% by 2028. Hospitals charging over 300% of Medicare rates could lose their nonprofit status.
It passed the House 66-27 and the Senate 39-11. Gov. Mike Braun is expected to sign it.
(Story by Network Indiana)
