Watching successful programs disintegrate due to state budget cuts is particularly disheartening. Adding bypassing investment in other opportunities to that makes it downright depressing.
A widely supported dropout prevention program called Jobs for America's Graduates was expanded under former Gov. Eric Holcomb, but has now lost all its state funding.
Similarly, the statewide initiative through the Dolly Parton Imagination Library aimed at increasing literacy in Hoosier children is in peril after lawmakers removed it from the state budget. A private fundraising effort is ongoing, but its future is unclear.
These are ongoing programs that might fail.
On top of that, there are examples of initiatives that could be created or increased to improve the lives of Hoosiers.
For instance, at least 16 states have sales tax holidays for parents buying school supplies. It could save families a significant amount when you consider clothes, computers and other supplies needed.
Gov. Mike Braun proposed this holiday, which also would have covered youth sports purchases — even putting it in his draft budget. But other priorities won out and it was eventually removed.
Or what about actually increasing money going to food banks at a time when food insecurity is high? The budget maintained a $2 million line item but saw no increase despite food banks facing higher demand.
And I haven’t even mentioned the state employee layoffs that are happening. Recently the Indiana Department of Workforce Development laid off 15% of its workforce.
Impact on revenue
And I want to be clear about one thing. The state is still seeing increased tax collections — just not as robust as expected.
In fiscal year 2025, Hoosiers paid $22.2 billion in taxes — including sales, income, corporate, gaming, fuel and others. That was about $740 million more than the prior year.
The problem is that some programs like Medicaid are growing so fast it squeezes out other worthy initiatives.
There is still wiggle room though. For instance, the state could afford both JAG and the Dolly Parton program.
Indeed, lawmakers created a Freedom and Opportunity in Education Fund and appropriated $50 million to it each year. It doesn’t direct the money to any specific programs, instead just outlining general uses such as improving academic performance, recruiting educators in high-need areas, expanding computer science programs, reading intervention and dropout prevention.
We will have to wait and see what the Indiana Department of Education and the Braun administration use that money for instead.
Tax cuts continue
Other initiatives — like eliminating the tax on adult diapers or feminine hygiene products — also can happen. But lawmakers instead continue to slowly reduce Indiana’s flat income tax rate, which means less money comes to the state.
Indiana’s individual income tax rate has dropped from 3.4% to 3.05% since 2015 via a phased-in reduction. And it’s scheduled to drop to 2.9% by 2027.
Indiana’s corporate income tax rate has also dropped.
For several years, when Indiana was swimming in new revenue and the state was plowing billions into new buildings, paying down unfunded pension obligations and incentivizing regional development, it made sense.
But that’s not the case anymore. And the tax cuts are happening at such an incremental pace that most Hoosiers don’t even realize it. Collectively, though, those dollars could be used to improve services, continue successful programs and generally invest in the future.
Of course no one likes paying taxes and it’s easy to support tax cuts. But I am curious what the ultimate goal is and whether lawmakers will ever admit a certain level of revenue is needed to move Indiana forward.