Fiscal leadership confident in Indiana’s finances with reserves at $2.5B
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A trio of Indiana’s budget leaders iterated their confidence in the state’s finances at the end of the 2025 fiscal year with $2.5 billion in the bank.
“Hoosiers can remain confident that our financial footing is stable, despite a year marked by economic fluctuations and a lower-than-expected forecast,” said State Comptroller Elise Nieshalla. “Our reserve continues to serve as a practical safeguard, reflecting Indiana’s commitment to fiscal responsibility.”
In April, the state projected it would receive $2 billion less than expected in a revenue forecast, forcing lawmakers to scramble to make cuts near the tail end of the 2025 legislative session. Indiana’s fiscal year starts on July 1 and ends on June 30.
“It was a bleak day, if you recall,” summarized Lisa Hershman, the secretary of Management and Budget. “We were clinging, I would say, and hoping for a $14 million surplus. I’m proud to say, we far exceeded that.”
The surplus for the 2025 fiscal closeout was $337 million, a number buoyed by advanced tax payments usually paid in December.
“So next year, we start out down $160 million,” said Rep. Ed DeLaney, D-Indianapolis.
DeLaney and Rep. Greg Porter, another Indianapolis Democrat, noted that the closeout doesn’t factor in the impact from President Donald Trump’s “Big, Beautiful Bill,” which will cost Indiana hundreds of millions of dollars.
“I have asked the budget director to get us that information … and not wait for the (next) forecast in December. Because the legislature needs to know and the public needs to know what the impact is,” DeLaney continued.
That $2.5 billion reserve amount is enough to fund state government for 40 days with no new revenue, within the 30-60 day range considered generally advisable.
Reserves will be 11.2% of Indiana’s spending, at the lower end of the 10-15% recommended to maintain Indiana’s AAA bond rating.