Indiana State Budget


Indiana State Budget – House Bill 1001: the House-passed version

The House version of the budget bill contains minimal new environmental or conservation funding.  Following is a summary of key provisions of the House budget bill.

Indiana Department of Environmental Management

Appropriations for most programs remain at current levels, as recommended by Gov. Holcomb in his budget proposal.   There is a $1.6 million increase for the state clean-up program, to fund more staff to oversee one specific clean-up site in Indianapolis.  About $10 million in added funding for underground storage tank clean-up is being allocated from the Excess Liability Trust Fund since the passage of a 2016 law that increases the amount of funding available to a specific company which utilizes the program for leaking tank cleanup.

Funding for drinking water protection programs remains flat despite the growing need to ensure that Indiana’s drinking water supplies remain safe.  IDEM’s drinking water program staff has dropped over the last 12 years and is limited in its ability to monitor over 4,000 water systems statewide.

Indiana Department of Natural Resources

The DNR’s operating budget is slightly increased, with modest additional general funds ($4 million a year agency-wide) allocated to multiple divisions.  The Division of State Parks is tapping more of its dedicated fund– about $4.2 million more a year –as a result of more state park fee revenue from a fee increase.   Yet proposed funding for maintenance and repairs at DNR properties such as state park shelters, trails, and infrastructure totals just $38.2 million for the biennium, well below the amount needed to prevent further deterioration and bring these structures and facilities into a state of good repair.  Contrast this with funding appropriated for DNR construction and repairs 10 years ago:  $71 million in 2005-07, and $72 million in 2007-09.  As a result, iconic DNR structures built by the Civilian Conservation Corps are at risk of being lost.

No new funding is slated for the President Benjamin Harrison Conservation Trust — its general fund appropriation remains a dismal $94,090 a year.

Indiana Department of Agriculture 

Clean Water Indiana’s general fund appropriation remains at its current $1 million a year.

Indiana Department of Transportation

Public transit funding remains flat in the House budget bill, at $44 million a year.

The Hoosier State passenger rail line between Indianapolis and Chicago continues to receive a $3 million a year appropriation.



In the 2017 session the Indiana General Assembly will adopt a state budget for the next two years.  The 2018-2019 budget is expected to authorize about $16 billion a year in state spending from the general fund.  Another $15 billion a year will be appropriated from dedicated funds (fees and dedicated taxes) and federal funding.

Indiana Department of Environmental Management and Indiana Department of Natural Resources agency budgets


Less than 1% of total state general fund appropriations go to IDEM and DNR, yet both of these agencies have experienced regular budget cuts over the last 10 years, beginning during the economic recession of 2007-08.  Cuts have continued since then even though state revenues returned to more normal levels.  Following are some key indicators of how the agency budgets and programs have fared over this period:


General fund appropriations have declined about $9 million a year over the last 10 years, with total annual appropriations declining by roughly $23 million a year over this same period – a 26.5% decline in general funds and a 17% decrease in overall appropriations.

idem-state-logoOne result is that IDEM staffing has reached a troublingly low level of 800 positions, compared to over 950 in 2008.   Other results of these budget cuts include an inability to conduct needed water quality monitoring, infrequent inspections of polluting facilities like CAFOs, and agency staff stretched thin as they attempt to cover multiple regulatory programs.

These cuts occurred mostly due to the Daniels and Pence Administrations’ policy of imposing annual reversion targets on state agencies.  IDEM reversions amounted to a total of $200 million over the last 10 years. Reversions occur when budgeted amounts are intentionally left unspent, with any savings applied to the state budget surplus which has continued to grow beyond what’s needed to be fiscally prudent while IDEM, DNR and other state agencies struggle.

Budget request:  End budget reversions for IDEM and restore funding to pre-recession levels. Increase permit fees to a level that fully funds the cost of permitting programs. Reestablish and fund an independent enforcement branch within IDEM.


Over the last 10 years the DNR received $18 million less in general funds compared to what they would have received had the DNR budget remained static.  Overall, IDNR reverted $124 million during this period.  14% of DNR’s authorized staff positions are vacant, and the agency continues to lose veteran, accomplished personnel to retirement before they can pass on their experience to the next generation of DNR staff.

idnrThe decline in DNR funding is very noticeable in the state of disrepair seen in DNR facilities around Indiana – state park buildings, trails, and water and sewer infrastructure, for example.  Construction and rehabilitation funding for DNR properties declined by about half over the last ten years, except for an increase in the last biennium.  This one time boost in funding was not nearly enough to catch up with years of deferred maintenance.  As maintenance and repairs continue to be delayed, the eventual cost of returning these facilities to a state of good repair will grow substantially.  What’s more, iconic historic structures like shelters, picnic areas and rock walls built by the Civilian Conservation Corps are at risk of deteriorating past the point of saving them.

Budget request:  End budget reversions for DNR.  Increase general fund and dedicated fund appropriations to pre-recession levels. Replace the Division of Forestry’s lost dedicated revenue source so that state forest timber sales are not relied on for Division funding. Increase construction and rehabilitation funding to a level that keeps DNR facilities in a good state of repair. 

Land Conservation

spring forestIndiana’s premier land conservation programs are at a critical juncture.  The Bicentennial Nature Trust (BNT), created in 2012 with $30 million in state and private funding, has committed all of its available funds.  The Indiana Heritage Trust, reorganized along with elements of the BNT as the President Benjamin Harrison Conservation Trust in 2016, has received no meaningful state appropriation since 2009 and is funded now by environmental license plate revenues, which are declining due to the proliferation of new specialty plates.

Together, these two highly successful land conservation programs have protected over 81,000 acres of new public forest lands, wildlife habitats and other wild areas in Indiana, and leveraged over $110 million in private or other non-state funding.

Budget request: Appropriate $3 to $5 million a year for the Harrison Conservation Trust, ideally from a dedicated, continuing source of revenue. 

Water Quality

Mounds LakeClean Water Indiana is a successful program that helps landowners prevent soil erosion, nutrients and other runoff that impair Indiana’s waterways by funding best management practices – stream buffers, tree planting, grass waterways, for example.   The program is funded by a share of state cigarette tax revenue along with a $1 million a year general fund appropriation.  Due to smoking prevention programs, cigarette tax revenues are declining.

Budget request:  Appropriate $2 million a year in addition to the cigarette tax revenue for Clean Water Indiana, ideally from a dedicated, continuing source of revenue.


Transportation Funding

Transit and Rail

IP trainThe Indiana Department of Transportation (INDOT) spends over $2 billion a year on transportation projects with nearly all of this funding used for constructing, repairing and maintaining roads and bridges.  Less than 4% is spent on sustainable transportation options—transit, railroads, and trails.

Historically, INDOT had received a very modest portion of state sales tax revenue dedicated to funding a share of local bus service.  But in 2011 the General Assembly discontinued this sales tax carve-out, and as a result state funding for local transit agencies has remained flat except for a small general fund increase in the last budget bill, which raised annual transit funding to $44 million a year.  This funding is distributed to Indiana’s 63 local transit agencies.  With rising operating costs and increased demand, Indiana’s transit agencies estimate they need at least $60 million a year from the state just to maintain current service levels.

In 2015, after a two year period during which INDOT, Amtrak, and the communities along the Chicago to Indianapolis route jointly funded the Hoosier State passenger train service, INDOT added Iowa Pacific Railroad to this partnership.  Iowa Pacific, a private carrier, provides rolling stock and manages the service, with train operations run by experienced Amtrak engineers and conductors.   The General Assembly authorized up to $3 million a year in the past two budgets for funding the state share of the Hoosier State. Ridership and revenue on the Hoosier State have grown under the new agreement.  Now, a modest, increased state investment would be a key element needed to help build this passenger rail service into a competitive travel choice for people traveling between Chicago and Indy or the communities in between.

Budget request: The state should increase its funding to $5 million a year which would allow an additional daily roundtrip train to be added. 

Trails and Greenways

greenwaysThe INDOT budget does not contain a specific appropriation for trail construction or maintenance. State funding for trail and greenway development includes these three principal sources:

  • Recreational Trails Program funding from the U.S. Department of Transportation which is administered by the Indiana DNR;
  • Land and Water Conservation Fund (federal) grant money which is administered by DNR;
  • President Benjamin Harrison Conservation Trust Fund (state) which allocates a share of its funding to outdoor recreation projects like trails.

Budget request: Trails and greenway organizations are seeking a $2 million annual state budget appropriation to supplement local trail maintenance funding.