Indiana Cuts Manufacturing, Workforce Training And Flight Incentive Funding

Indiana’s funding for several economic development initiatives have been left in limbo, after a $2 billion shortfall led to aggressive budget cuts. Photo by Steven Van Elk, Unsplash.
News Release
INDIANAPOLIS — When state legislators said last month that expected revenue for the next two-year budget decreased by $2 billion, they partially turned to a handful of items of economic development grant programs and funds, eliminating $42 million in yearly allocations.
As a result, Indiana Secretary of Commerce David Adams and his leadership team will review these programs and decide whether to fund them from the more general funding of the Indiana Economic Development Corporation. This includes a catch-all fund for business promotions, which are not enough to fully offset the cuts.
Programs that have lost funding include grant programs that support the adoption of new production technologies, workforce training, and infrastructure development. Funds encouraging direct flights have also been withdrawn.
According to IEDC spokesperson Erin Sweitzer, the Secretary of Commerce’s review would seek to align economic development spending with the Republican governor Mike Braun’s vision, which includes workforce training, strengthening support for existing businesses, regional planning and Main Street entrepreneurship. Braun was elected in November last year after a campaign aimed at the priorities and transparency of the IEDC. He took office in January.
Business leaders have stressed the importance of many of the existing programs. In fact, Matt Mindrum, CEO of the Indiana Chamber of Commerce, said he believes that all the programs targeted by lawmakers have provided a strong return on investment in the past.
In addition, Adam Berry, vice president of economic development and technology at the Indiana Chamber of Commerce, said that business leaders should maintain programs that have been shown to help employers grow, invest in businesses, and attract and retain talent.
Lawmakers were forced to make decisions on revenues and expenses in the few remaining days of the session when they learned that the state was likely to earn $2 billion less than previously expected for the next two fiscal years. The final version of the two-year state budget approved last month included tripling cigarette taxes and cuts for a wide range of organizations and programs.
Funding for economic development programs has been reduced by about 25% overall. The budget for IEDC operations and its programs has been reduced to about $74 million, from about $100 million per year.
However, the agency’s business promotion entries have been significantly increased, from $20 million to $37 million per year, and IEDC-funded programs that previously had specific items were instead given a pool of funds. Sweitzer did not clarify when asked if it was a larger bucket of funds she was referring to. The IEDC’s operating budget also increased by $3.2 million per year, bringing the total to $11.3 million.
Programs that have lost funds for some items include grants for production preparation at $20 million per year, funds for the improvement of skills at $11.5 million per year, funds for economic development at $947,000 per year, funds for the establishment of direct flights at $5 million per year and the Industrial Development Grant Program at $4.85 million per year.
The largest program footprint is a production readiness grant that provides financial support to companies to adopt new innovative technologies and manufacturing processes. According to a study by the Central Indiana Corporate Partnership in October 2024, the Manufacturing Readiness Grant program provides $57 million in matching grants through 526 awards in 79 counties. According to Berry, the impact rose to 750 companies in 85 counties since the study.
In a statement, Bryce Carpenter, Chief Operating and Strategy Officer of Conexus Indiana, which runs the grant program, said the production readiness grant will transform the advanced manufacturing sector. He said it has led to improved automation, robots and artificial intelligence, which led to job creation and improved competitiveness.
Mindrum said the Indian Chamber of Commerce is “anxious to find alternatives” to these grants with similar benefits.
The Skill Enhancement Fund is also an important tool to improve workers’ skills, Mindrum said. The program provides grants to reimburse companies that have to provide training to workers in support of new capital investments.
Berry said that funding for incentivizing direct flights is also an important tool.
The funds allocated for the 2026-2027 budget will be available on Tuesday, July 1, at the beginning of the new fiscal year.