Indiana State Budget

Post-session update: The Budget Bill, HEA 1001

On the final day of the 2017 session, the Indiana General Assembly adopted a new state budget, authorizing $38 billion in state spending–from general funds, dedicated funds, and federal revenue — over the biennium.   For environment and conservation funding, the new budget provides little new investment to offset the budget cuts over the last ten years.  One significant funding victory was achieved, when the Indiana Senate added $4 million in dedicated funding to address the Department of Natural Resources’ deferred maintenance backlog.  This backlog is estimated to be at least $60 million and is likely higher.

Legislators did not follow HEC’s well-researched recommendations to boost funding for IDEM’s drinking water and contaminated site cleanup programs.  However, the general assembly did retain the Governor’s proposal to add funding for more state cleanup staff at one contaminated site in Indianapolis.

The President Harrison Conservation Trust was funded at the same level as the last budget, consisting of a token general fund appropriation along with an estimated $1 million a year in environmental license plate revenues.  Clean Water Indiana funding remained level as well, with $1 million in annual general fund appropriations along with $2.9 million a year in dedicated cigarette tax revenues.

For sustainable transportation, the $3 million annual appropriation for the Hoosier State passenger rail service was included. Public transit received a modest funding increase, with $44 million appropriated in 2018 and $45 million in 2019 for the Public Mass Transportation Fund.


For broader background on sustainability-related investments in Indiana’s budget, please read below:

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.


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.

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.

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.

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.

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.