Federal Cuts, Local Impact
Here's How Trump's Cuts Will Hit Hoosiers
Dear neighbor,
Over the last 9 weeks, President Trump’s administration has revealed plans to cut billions in federal funding. He's vowed to slash the budgets of numerous agencies and cut funding for several programs.
Indiana is the third most reliant state on federal funding behind Louisiana and Mississippi. Nearly 44% of our budget comes from federal agencies and grants. Here are some of the biggest impacts Trump’s plans will have on Hoosiers.
Two weeks ago, the Trump administration imposed 25% tariffs on Canada and Mexico and doubled the tariffs on China to 20%. This week, he announced a 25% tariff on cars.
These tariffs are expected to heavily impact Indiana, with an article from The Conversation projecting our state as the third most impacted by Trump’s tariffs. Indiana is expected to lose $4.82 billion and see a 1.12% decrease in our GDP, affecting the auto, manufacturing, and agriculture industries.
The auto industry, one of Indiana’s biggest economic sectors, is expected to lose $28.2 billion because of these tariffs. These financial losses would put around 680,000 jobs at risk across the nation.
A Hoosier family of four is projected to spend an extra $2,836 each year, equivalent to half a year’s worth of utility payments.
Read more about how the tariffs could impact Indiana's economy here.
Two weeks ago, the Department of Education laid off nearly 50% of their staff. This large personnel cut will slow down the agency’s ability to support education programs across the country.
Indiana receives $1.8 billion from the US Dept. of Education (DOE) for K-12 and higher education, a little less than 10% of the Indiana DOE’s budget. The Division of Family Resources (DFR), which primarily funds schools with a high number of low-income students or students in need of special education, receives a little under $2 billion from the federal government. Indianapolis Public Schools (IPS) receives approximately $670,000 in Title III funding. These dollars help students who are learning English as a second language, and they benefit approximately 6,400 students in the IPS system. Additionally, students with disabilities rely on the DOE to enforce the right to an individualized education plan - without it, their needs may go unmet.
Without this federal funding, we will see growing inequalities in our education system. Wealthier neighborhoods will continue to have well-funded schools while marginalized communities will see services and programs in their schools dwindle.
These wealthier schools will be able to sustain their arts programs, STEM extracurriculars, and tutors, but schools in less affluent districts will struggle to maintain their services. All young Hoosiers deserve to have access to an education that sets them up for success, regardless of their location or tax bracket.
This decision to get rid of the Department of Education could also impact hundreds of college students in our state. The department is the largest source of loans for US college students, with the outstanding loan balance in the US standing at $1.69 trillion for nearly 43 million student borrowers.
The Trump administration has said that these loan services will be redistributed to various other agencies and departments, but it is unclear how exactly this redistribution would work.
Read more about how Indiana schools could be affected by Trump's decision to dismantle the U.S. Department of Education here.
Congressional Republicans have proposed $880 billion in federal cuts, which would be impossible to achieve without cutting Medicaid or Medicare. Since roughly 70% of Indiana's funding for Medicaid comes from the national government, Indiana could be in a serious bind. It's estimated that close to 484,000 Hoosiers would lose their health care coverage if these federal cuts are passed and Indiana fails to cover the costs.
Read more about the impact federal cuts will have on Medicaid in Indiana here.
It’s not just Medicaid that's been targeted. The National Institute of Health (NIH), the world’s largest public funder of medical research, is cutting the amount universities receive for research to a flat rate of 15%.
Indiana University and Purdue University’s federal funding for on-campus medical research exceeds 55%. A federal court has temporarily paused the NIH cut, but if they're implemented millions of dollars would be cut from essential medical research in Alzheimer’s and cancer in Indiana.
Read more about how cuts to NIH would impact our public universities here.
The Trump administration is planning to cut half the staff from the Department of Housing and Urban Development (HUD). HUD runs national programs to make housing more accessible, and it is also responsible for enforcing the nation’s fair housing laws.
The Trump Administration recently cut grants to The Fair Housing Center of Central Indiana (FHCCI). The Center provides various resources to people facing housing insecurity. It also provides legal support to individuals dealing with discriminatory housing practices. The administration has cut the remainder of a $138,889 grant expected to last through June 30, 2025.
Indiana is already considered one of the most difficult states to rent in, with Fort Wayne ranked the third least renter-friendly city in the U.S., according to USA Today. These cuts could worsen the conditions for tenants in Indiana and lead to more discriminatory practices within our housing market.
Read more about the HUD cuts here.
As always, please contact my office at h86@iga.in.gov with any questions or concerns.
Well made presentation. Thank you. I hope your colleagues in the legislature are paying heed.
Ed, my colleagues at Hoosiers for Democracy have been working with other grassroots organizations as well as with Dana Black, Danya Colbert, and just connected with Wes Brown this weekend at our H4D Peoples Town Hall. Our substack is a publication to educate voters about what it means to live in this time of an authoritarian takeover at the Statehouse and federal level. Check out https://hoosiersfordemocracy.substack.com/. So glad to see this new substack—an emergent 4th estate!