Smaltz: Indiana's fiscal health is strong and Hoosiers are seeing the benefits

There are always going to be competing opinions about Indiana's economy, our budget and the decisions being made by the General Assembly. However, when the books close at the end of a fiscal year, we have something more than opinions: We have the actual numbers.

As a member of the House Ways and Means Committee, I have had the opportunity to be a voice for our district in decisions that shape Indiana's budget and fiscal future. The numbers from fiscal year 2026 tell a clear story. Indiana ended the fiscal year on June 30 in a remarkably strong financial position, with nearly $4 billion in combined reserves (approximately $274.7 million Medicaid reserve, $739.6 million Tuition reserve, $1.12 billion Rain Day Fund and $1.86 billion Surplus Balance).

That matters. A state's fiscal health isn't simply about how much money comes in or how much sits in an account. It's about whether we can provide essential services, weather economic uncertainty and respond to emergencies without constantly reaching deeper into taxpayers' pockets.

Indiana is in a position to do all three.

Our state collected approximately $24.2 billion in General Fund revenue during fiscal year 2026, an increase of 6.8% from the previous fiscal year. Even more importantly, revenue growth significantly exceeded what was projected when the state's budget was created. Our economy continues to demonstrate strength and resilience. In fact, Indiana's economy is growing at a faster rate than all of our neighboring states, providing increased opportunities for Hoosiers.

At the same time, Indiana continues to provide meaningful tax relief. The legislature has cut taxes for Hoosiers every year over the last decade saving taxpayers $26.9 billion, including ongoing cuts to personal income tax. The individual income tax rate is currently 2.95%, and on Jan. 1, 2027, it will fall again to 2.90%, a cumulative cut of 0.25 points since 2023. We are proving that fiscal responsibility and tax relief do not have to be competing ideas but can work in tandem.

Indiana's combined reserves represent about 17.6% of state-funded expenditures, which equates to roughly 63 days of operations.

Some may ask why the state doesn't simply spend more of that money. The answer is simple: Reserves are there for a reason. Those reserves include resources set aside to address specific needs and unexpected challenges, for example the recent historic storms that impacted communities and thousands of Hoosiers across the state. Being in a strong financial position allowed the state to quickly deploy emergency aid grants through the Department of Homeland Security to affected residents.

Just like a family keeps an emergency fund for unexpected expenses, Indiana needs a financial cushion for a recession, natural disaster, sudden revenue decline or other unforeseen challenges. Maintaining healthy reserves means we can respond without immediately raising taxes, cutting essential services or taking on unnecessary debt.

None of this means Indiana has no fiscal challenges. Responsible budgeting requires us to acknowledge those challenges, continue looking for efficiencies and make sure taxpayers receive the best possible return on every dollar.

But there is a difference between acknowledging challenges and claiming Indiana is fiscally unstable. The fiscal year 2026 numbers simply don't support that conclusion. Indiana has also continuously maintained a AAA credit rating from all three credit agencies since 2010, and is one of 13 states to have that rating

Indiana is balancing its budget, providing tax relief, maintaining strong reserves and preparing for the future. This isn't something we should take for granted. It's something that we should protect for future generations and it's something that every Hoosier should be proud of.

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State Rep. Ben Smaltz (R-Auburn) represents House District 52,
which includes all of DeKalb County, and portions of Noble and Steuben counties.
Click here to download a high-resolution photo.

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