After marathon day, Indiana lawmakers approve budget to close out legislative session

INDIANAPOLIS – Thursday stretched into early Friday morning before the Indiana Senate passed the state budget, bringing an end to the 2025 legislative session.

The Senate adjourned just before 1:40 a.m. following a marathon session to conclude this year’s business.

The Indiana House of Representatives passed the roughly $45 billion two-year budget in a 66 to 27 vote around 12:45 a.m. Friday. The Senate voted about a half-hour later, approving it in a 39-11 vote.

Both parties supported an increase to the state’s cigarette tax, a measure meant to short up a projected revenue shortfall of approximately $2.4 billion.

But lawmakers spent hours debating a provision giving Indiana Gov. Mike Braun full control over the IU Board of Trustees before passing the final budget. The measure was included in the final bill.

As for the cigarette tax, the state will raise the price to $2 a pack, doubling the current rate. Other tobacco products like cigars, chewing tobacco and vape cartridges will also see tax hikes. The measure is expected to raise $800 million over the two-year span.

The budget included $954 million for education, with $93 million going toward the expansion of the state’s school voucher program.

K-12 education remains fully funded, with a 2% increase in 2026 and 2027. Lawmakers decided not to delay the anticipated decreases in the individual income tax rate.

The budget didn’t come without some cuts. Higher education funding saw a 5% decrease, while a late change cut public health spending from $100 million to $40 million. The budget also eliminated funding for public broadcasting.

Budget approval was mostly along party lines.

In the House, one Democrat (State Rep. Wendy Dant Chesser, D-Jeffersonville) voted in favor of the bill. In the Senate, one Democrat (State Sen. David Niezgodski, D-South Bend) approved it, while two Republicans (State Sen. Jean Leising, R-Oldenburg, and State Sen. Mike Young, R-Indianapolis) voted against it.

Senate President Pro Tempore Rodric Bray (R-Martinsville) acknowledged that the biennial budget was difficult.

“There’s no question passing a balanced state budget this year was a tremendous challenge, but we were able to do so by exercising serious fiscal discipline and making difficult decisions.

“At the end of the day, this budget will meet the needs of Hoosiers while protecting our taxpayers. In addition to the budget, our caucus is celebrating the passage of $1.3 billion in property tax relief for Hoosier homeowners and other good-government measures that will help our state continue to grow and thrive. I want to thank our partners in the House of Representatives and Gov. Braun for helping make this session a success.”
Senate President Pro Tem Rodric Bray

Several Democrats, including Senate Minority Leader Shelli Yoder (D-Bloomington), voiced their displeasure over the final budget.

“We walked into this session with a historic opportunity — and this budget squandered it.

“We could’ve invested in working families. We could’ve fully funded schools. We could’ve protected public health. We could’ve provided access to child care and pre-k.  Instead, this budget turns its back on Hoosiers and hands over the reins to those who already have the most.”
Senate Minority Leader Shelli Yoder

Braun released a statement about the end of the legislative session:

“As the 2025 legislative session concludes, I want to thank our partners in the legislature for their dedication and collaboration in advancing key priorities of my Freedom and Opportunity Agenda.

“We’ve accomplished a great deal this session. Despite the challenges posed by economic uncertainty, we embraced an entrepreneurial spirit, tightened the belts of state government, and passed a responsible biennial budget that will keep Indiana among the top states in the nation to raise a family and start a business.

“We took significant steps to make healthcare more affordable and transparent, empowered parents to take the lead in their children’s education through universal school choice, and delivered meaningful property tax relief for Hoosier homeowners, farmers, and small businesses.

“This was just the first legislative session of my administration, and I’m proud of the progress we’ve made. I look forward to building on this momentum and continuing to work with our legislature to make Indiana a beacon of freedom and opportunity for years to come.”
Gov. Mike Braun