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The 2025 legislative session of the Indiana General Assembly kicked off on Jan. 8. Legislators, advocates, and legal professionals are preparing for a host of major issues to dominate the Statehouse for the next four months, until adjournment at the end of April.
Beyond the issues, the political dynamics will also be interesting to watch, as Gov. Mike Braun navigates his first session from the second floor. His prior experience as a legislator in both the Indiana House and the U.S. Senate will certainly inform how he engages with legislative leaders to achieve his policy goals, which he is expected to elaborate on in his first State of the State address on Jan. 29.
Importantly, Braun has immediately surrounded himself with a cabinet and agency heads with major legislative and policy expertise.
Another new face to leadership this session: Senator Shelli Yoder, D-Bloomington. Yoder took over as Senate minority leader in December, defeating embattled Sen. Greg Taylor, D-Indianapolis.
While significant politically, don’t expect much of a change policy-wise, as the ten-member caucus will remain a super minority.
From economic development to education to healthcare policy, here’s a look at the hot button issues that will take center stage:
1. The budget
This budget session is set to be a pivotal moment for our state’s financial future. Key priorities include bolstering education funding, maintaining public health dollars for local health departments, and addressing infrastructure needs, particularly in rural areas.
Lawmakers also need to balance calls for tax cuts with the demand for investments in public services, such as mental health support and economic development.
To make matters more complex, fiscal leaders also must fill a $400 million deficit that remains in the state’s Medicaid budget as a result of an actuarial miscalculation back in 2022.
Look for the Legislature to implement better controls on eligibility and reform the Healthy Indiana Plan to rein in costs moving forward.
The April revenue forecast will be pivotal in determining what fiscal leaders will appropriate across the board.
As debates unfold around the budget bill, this session promises to be a balancing act between maintaining fiscal responsibility and meeting the growing needs of Indiana’s residents and businesses. The outcome will shape the state’s financial trajectory for the next two years and set the tone for future policy initiatives.
2. Tax reform
Lawmakers have spent the last two years studying and taking substantial public input on Indiana’s tax structure through the State and Local Tax Review Task Force.
In November, the Task Force released their policy recommendations, which focused on property and local income taxes.
Legislators will consider these recommendations with the goal of enacting more effective controls on property tax bills, reducing the floor for business personal property taxes, and enabling larger municipalities to adopt their own local income tax rate, all while trying to maintain sufficient education funding. Fiscal leaders in the Legislature are working closely with the Braun administration to merge their proposals into one.
3. Health care
Indiana’s health care system continues to be a critical issue for the legislature, especially as the state deals with rising health care costs and a need for greater access to care in rural communities.
The 2025 session will see a push for measures that attempt to address prescription drug costs, increase competition, and limit prior authorization. Additionally, the issue of mental health and maternal-child health — particularly disparities in healthcare access — is a part of broader discussions on how to improve health outcomes across the state.
4. Education
Education policy will continue to be front and center over the next few months, with tension between charter schools and public schools continuing, particularly in Indianapolis.
While Indiana has seen an uptick in school choice programs, there remains a significant debate over funding for public education, teacher pay, and how to best address gaps in student learning.
5. Environmental policy and energy
Environmental and energy policy will take important space during session. As grid capacity and reliability continue to make the news, Indiana will likely discuss the impact of new data centers coming online in the coming years. Debates also could arise once again over the state’s role in regulating carbon capture.
Braun and legislators alike have also promised to keep utility rates top of mind throughout the session. Water policy continues to be a hot-button issue, with multiple bills filed to protect water resources, in response to the LEAP district controversy that has dominated Statehouse discourse the last several years.
6. Economic development
Indiana’s economic development policies are expected to undergo significant scrutiny and potential reform.
Lawmakers are likely to explore ways to enhance incentives for businesses, particularly those in high-growth sectors like technology and advanced manufacturing, with the aim of attracting new investments to the state.
Proposals may include expanding tax credits, offering more robust support for workforce development programs, and incentivizing businesses to locate in underserved or rural areas to ensure broader economic growth.
Additionally, some lawmakers have called for increased transparency of the Indiana Economic Development Corp.’s incentive deals, following controversy over several development projects throughout the state. Balancing competitive business incentives with long-term economic stability will be a key challenge as the state looks to position itself as a leader in the evolving global economy.
Conclusion
The 2025 session will be a big one for legal professionals, policy wonks, interest groups, and other stakeholders.
Staying engaged and up to date on the ever-changing landscape of the session will be essential. A full list of legislation filed this session can be found on the Indiana General Assembly’s website.
By understanding the legislative priorities that are emerging, we hope legal practitioners can better advise clients and prepare for the shifts likely to shape the Indiana Code in the year ahead.
As always, the final outcome of these debates will be shaped by a combination of politics and public input, making this legislative session one to watch closely.•
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Lacey Berkshire and Mindy Westrick Brown are counsel at Faegre Drinker. Chip Garver is a partner.
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