Indiana Lawmakers Negotiate a Slimmed Down Budget

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5/8/2025

As the legislative session came to a close in Indiana last month, lawmakers raced to finalize the state’s budget for the 2025-2027 fiscal year before they adjourned for the year. Lawmakers passed the budget on April 29th, the last day of the legislative session and sent it to Governor Braun’s desk for signature. Governor Braun signed the two-year $44 billion budget earlier this week.  

The budget that passed looks very different from budget proposals from earlier this year. The state’s recent revenue forecast showed a $2 billion shortfall, causing lawmakers to reconsider the budget and make tough cuts across the board. State agencies and higher educational institutions both took a 5% reduction in funding, along with cuts to workforce spending. The Manufacturing Readiness Grant was reduced to $0 from $20 million.  The grant provided resources to manufacturing-focused companies developing or integrating smart technologies such as 3D printing, data analytics, and augmented or virtual reality.  The Skills Enhancement Fund, a workforce training grant, was also cut completely. Not all funds were decreased, however. The Business Promotion and Innovation Fund, which went from $17 million per year in FY24 and FY25 to $37 million in the coming two years.   

Lawmakers also made big changes to the business personal property taxes that will reduce the cost of capital investment for many manufacturers. The threshold for the “small business exemption” will increase from $80,000 to $2 million in 2026, providing real and lasting relief to small manufacturing businesses.  

While every budget cycle has its up and downs for the industry, AEM will continue working with lawmakers to ensure that manufacturers have a seat at the negotiation table.  

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