INDIANAPOLIS — State lawmakers said there's a lot of uncertainty surrounding the economy, resulting in major cuts in the state's budget. As they prepare to finalize the state's budget, this move is very concerning.
"When the US gets a cold, Indiana's got pneumonia," Representative Gregory Porter (D) of District 96 said. "We got pneumonia because we're a manufacturing state. And with the tariffs and other issues out there, the federal government right now, this really affects our bottom line.”
Indiana lawmakers were told to chip away a staggering amount nearly $2.4 billion from the state's budget through 2027.
"We're going to have to make tough decisions. We're going to make some cuts," Senator Ryan Mishler (R) of District 9 said. "If anybody has the audacity to come and ask us for more money, more than likely just take them out."
A budget committee meeting on Wednesday to discuss the revenue, economic, and Medicaid forecast before the end of the 2025 legislative session revealed a slight dip in economic growth for the Hoosier state. With a looming recession on the horizon, lawmakers say now is the time to consider new sources of revenue to ease financial constraints.
"In the 21 years I've been here, I was here during the recession in '08, '09 budget, this one scares me a lot more than that because the numbers are a lot higher," Mishler said. "And back then, if you remember, we had federal money to backfill. We don't have any money. This is all on us, so we're going to have to live within our means."
When accessing where those cuts will be made, republicans said nothing is off the table. While democrats offered several solutions that can preserve critical programs for Hoosiers.
"For example, the managed care assessment fee, which is referred to as the MCAP, could raise up to $1 billion a year to fully fund Medicaid," said Senator Fady Qaddoura, (D) of District 30. "Second, we offered on the Senate floor raising cigarette taxes, raising it by $2 a year as an option, we'll raise close to $800 million. Some of you asked the question about the delay or the extension of the state income tax reduction that would generate close to $270 million just by pushing out two years."
Governor Mike Braun issued a statement following the state budget committee forecast, saying in part, “as a business owner, I had to navigate through tough times and always came out stronger because I focused on cutting waste, eliminating overhead, and getting back to the basics."
He goes on to say, “we must finalize the budget and protect Hoosier taxpayers from a worst-case scenario."
One lawmaker is ready to work across the aisle to create the best possible outcome for Hoosiers.
"If we all have collaboration, the picture is not as bad as it seems," said Senator David Niezgodski (D) of District 10. "That picture can be better if we begin to collaborate in meaningful actions."
Both Republican and Democratic lawmakers stated they are hoping education would be the last resort for cuts. The decision of what will get cut will have to be made in a week.
