House budget skips capital projects; other higher ed requests

“You can’t have it all” is the message state legislators seem to be sending with the current iteration of the state budget that passed the House – particularly for the state’s public higher education institutions, who see their budgets held flat for the next biennium . . . and no capital projects in the latest HB 1001 draft from the House GOP Caucus.

Indications that this would be the case materialized early on in the budget process before the session even began. With the threat of money being tight this next biennium, we had heard rumblings early that budget leaders were advising universities that there may be no funding available for capital projects. We also were aware there could be some discussions with higher ed institutions involving lawmakers pressing them to find ways to creatively cut to save some money should lawmakers have to scale back their state appropriations.

The first version of the budget proposed by Governor Mike Braun (R) did not include any of the Indiana Commission for Higher Education’s funding recommendations for the state’s seven public institutions. The Governor’s budget held operating appropriations flat at FY 2025 levels, and did not include any funding for the universities from the ICHE outcomes-based performance funding formula. That budget also failed to outline funds for any capital projects and left out the usual funding for repairs and rehabilitation (R&R).

The House Republicans’ budget kept most of what the Braun Administration had in its proposal, including the flat budgets and zero capital projects. But, they restored and increased R&R funding and placed in the outcomes-based performance funding, which was left out by the Braun Team, attributed to being just an oversight (after all it is his first budget).

The R&R appropriations break down as follows, per fiscal year in the current budget proposal:

  Institution  R&R Appropriations
Indiana University $ 22,021,310
Purdue University $ 18,605,766
Indiana State University $   2,136,051
University of Southern Indiana $   1,736,924
Ball State University $   4,522,783
Vincennes University $   1,474,471
Ivy Tech Community College $   4,885,428

If you harken back to November, ICHE had recommended the state prioritize funding the deferred maintenance capital projects for each state university, apart from Purdue University, which was the only institution with a top capital project for a brand new building. The other six schools’ priority projects involved what were described as overdue renovation projects. The recommendations totaled $464 million, including $212 million for electrical and mechanical improvements and $36.5 million for equipment upgrades. The total for R&R in the current budget proposal emerging from the House is a little more than $55 million.

These were the No. 1 capital project priorities from each university, all of which involved renovations and maintenance work to existing structures, except for the one new building for Purdue:

–  Purdue WL new Life Sciences Research Building: $90 million
–  Ivy Tech Terre Haute Campus Restructure: $67.1 million
–  Vincennes Automotive Tech Training Center: $32 million
–  USI Academic Renovation Phase II: $43 million
–  Ball State Bracken Learning Commons: $88.42 million
–  Indiana State Holmstedt Hall: $47 million
–  IU Biology Building and Central Heating Plant: $96 million

In what now could perhaps be looked back on as an indicator of what was to come, when universities presented their budget requests to the House Committee on Ways and Means on January 14, we saw some pushback from committee members on the concept of the state continuing to fund university capital projects. Rep. Jack Jordan (R) of Bremen, chair of the panel’s Budget Subcommittee, pressed Ball State University President Geoffrey Mearns on why they continue to invest in capital when he believes the higher education business model is increasingly transitioning to online offerings.

“I’m really struggling with why we would invest in capital at this point of a transitioning business model, and I’ve been saying this for the last eight years and not making the progress I’d like to,” Rep. Jordan laments. He also prefaced his comments stating he believes others on the committee also agree with him.

President Mearns responded, focusing on Ball State’s particular Bracken Library project, arguing the space renovation and capital projects are more than just about getting shiny new things on campus. He mentioned revitalizing the old library into a central collaboration space is beneficial for modern students to fit with the changing world raised by Rep. Jordan.

“I would submit to you that this is a good investment, consistent with your view of the future,” Dr. Mearns contended. “I also think, and this is again, this is my perspective, maybe my bias, I still believe a college educational experience on campus is very valuable, because it’s not simply what our students learn in the classroom or what they can acquire online.”

The House budget writers did add a provision within this budget directing ICHE to report on the utilization of physical facilities primarily used for instruction at each state educational institution, further indicating that this year’s decision to not fund any capital projects likely isn’t just a one-off . . . and there could be more scrutiny over what gets funded and what doesn’t in the future

In addition to the capital projects recommendations, ICHE also asked state lawmakers for an “inflationary increase” for all of the state’s institutions, consisting of a 1.0% base operations adjustment for 2026 and a 2.0% adjustment for 2027. That, as we now know, did not come to fruition in the latest budget from the House. In 2023, state lawmakers provided a 4.0% and 6.0% increase for higher education operations, which then also fell short of the commission’s recommendations.

Budget requests per university in their original presentations varied, some schools requested no line item increases, such as Purdue, while others asked for new line items. Most new line item requests were not granted in the House budget proposal, with IU getting one new line item for its IU Innovates program. IU also requested a new $5 million line for public safety, which Ways and Means Committee members rejected during the university’s budget presentation, claiming that the state doesn’t typically help its universities fund public safety. USI also asked for a new line item for the Center for Applied Business Technologies, which was not granted in this budget.

Here’s our breakdown of the latest in the proposed budget as it passed the House:

Indiana University
Bloomington Campus: $209,473,239 (Total Operating Expense), $18,528,752 (Fee Replacement)
Regional Campuses: East ($15,749,696), Kokomo ($17,429,045), Northwest ($20,683,341, $2,984,375 Fee Replacement), South Bend ($26,617,833, $1,447,700 Fee Replacement), Southeast ($22,481,328), Fort Wayne Health Sciences Program ($5,120,388)
Indianapolis Campus: $135,000,000 (Total Operating Expense), $4,339,198 (Fee Replacement)
School of Medicine: Various campuses with operating expenses ranging from $2,172,777 to $2,906,524
Schools of Medicine and Dentistry: $111,061,865 (Total Operating Expense), $6,966,301 (Fee Replacement)
Additional Programs: Dual Credit ($4,441,005), IU Innovates ($1,000,000), Clinical and Translational Sciences Institute ($2,500,000.

Purdue University
West Lafayette $252,971,844 (Total Operating Expense), $27,485,700 (Fee Replacement)
Regional Campuses: Northwest ($50,661,479, $3,781,240 Fee Replacement), Fort Wayne ($47,438,549, $3,044,250 Fee Replacement)
Additional Programs: Dual Credit ($1,188,585), County Agricultural Extension Educators ($8,000,000), Agricultural Research and Extension ($9,000,000.

Indiana State University
Total Operating Expense: $77,960,326
Fee Replacement: $10,498,371
Additional Programs: Dual Credit ($149,535), Principal Leadership Academy ($600,000), Nursing Program ($204,000), and more.

University of Southern Indiana
Total Operating Expense: $53,831,608
Fee Replacement: $11,847,730
Additional Programs: Dual Credit ($493,335), Historic New Harmony ($486,878), Early College Bridge Program ($600,000).

Ball State University
Total Operating Expense: $138,952,025
Fee Replacement: $21,836,212
Additional Programs: Dual Credit ($235,440), Entrepreneurial College ($2,500,000), Academy for Science, Mathematics, and Humanities ($4,384,956.

Vincennes University
Total Operating Expense: $46,789,144
Fee Replacement: $4,926,599
Additional Programs: Dual Credit ($4,716,315), Career and Technical Early College Program ($3,000,000).

Ivy Tech Community College
Total Operating Expense: $248,772,295
Fee Replacement: $27,980,512
Additional Programs: Dual Credit ($21,934,755), Statewide Nursing ($9,000,000), Testing Centers ($710,810), Southern Indiana Educational Alliance ($1,057,738).

We’re hearing the universities are taking in this latest budget iteration with a “grateful” mindset – recognizing it could have been worse given all the talk about “tightening the belt” in this next budget. That also could be taking within the scope of higher ed sitting generally under a microscope a lot as of late, between calls from the Trump Administration to scrub its DEI initiatives or lose funding, and increased pressure coming from state lawmakers, who have been questioning universities for what they perceive as pushing certain ideologies on students that are inimical to Indiana’s values.

Still, you may recall we already got a preview of some frustrations from Ivy Tech and IU’s presidents over fairness in properly funding their campus facilities. In November, before the State Budget Committee, Ivy Tech President Sue Ellspermann focused much of her presentation advocating for Ivy Tech to get its fair share in money to upkeep its facilities. She noted the typical pace of the state only funding one project per year would take 38 years to address capital needs across Ivy Tech’s 19 campuses. IU President Pamela Whitten echoed (a little more bluntly) those same concerns over the state not giving the bigger schools their fair share in capital funding. Dr. Whitten also argued that limiting funding to one project per budget cycle is simply inadequate for a multi-campus system. “That’s something that we grumble about at IU,” President Whitten challenged.

With the budget now crossing the Rotunda to be scrutinized by the Senate, there’s still time to advocate for some capital project funding to make it in before the end of April. Expect to see the universities revise their approach in presenting their priorities when they appear before the Senate Committee on Appropriations on March 11. We are hearing that the Senate may be a little more open to some capital projects.

You will likely see each university’s leader focus on how their projects are more than just new things, or a new building, but a need to better serve students . . . and you may see more of those same fair funding arguments made by presidents Ellspermann and Whitten back in November too.