Amid growing national challenges for community economic development and a late-breaking $2.4B state budget shortfall at home that resulted in painful state cuts, Prosperity Indiana was able to secure significant progress on key legislation for our network during the 2025 session of the Indiana General Assembly. Not only was PI able to see Member Priority Legislation cross the finish line to become law, but with the help of our network and coalition partners we were able to defeat dangerous legislation and set up long-term progress on key CED priorities. However, with worrying fiscal concerns looming large, Indiana needs to commence significant work to align available resources to reinforce our critical community economic development infrastructure.
Prosperity Indiana organizes our Annual Policy Agenda across three issue areas: Housing Affordability; Community Development Resources; and Asset Building & Consumer Protections. To expand our advocacy efforts on behalf of our statewide Member network, PI convenes or co-leads three coalitions: the Hoosier Housing Needs Coalition, the Indiana Assets & Opportunity Network, and Hoosiers for Responsible Lending.
Here are key outcomes of the 2025 session of the Indiana General Assembly across those areas.
Affordable Housing
Prosperity Indiana and our partners in the Hoosier Housing Needs Coalition secured two key housing victories this session: the passage of SB 142 Eviction issues and the defeat of Criminalization of Homelessness in three different bills. However, the sector saw significant losses in budget cuts (detailed under the ‘resources’ section below).
PI Member Priority Bill SB 142 Eviction issues, authored by Senator Liz Brown (R-Fort Wayne) will make Indiana’s eviction sealing program more automatic and effective. The program, which began in 2022 following PI & HHNC advocacy and which has already sealed over 30,000 eviction cases, seals eviction records when a case is found in the tenant’s favor or when an agreement is reached between the parties. SB 142 will mandate that qualifying eviction cases be sealed when they are heard in court, which will reduce the chances that the record will create a ‘Scarlet E’ that will damage tenants’ housing stability for a significant percentage of the 9% of Hoosier renters who have an eviction filed against them every year.
PI and HHNC members also prioritized supporting Housing First and successfully defeated the criminalization of homelessness this session. Last summer, PI created a Housing First toolkit and training series to prepare partners to educate policymakers about threats from the out-of-state special interests from the Cicero Institute seeking to force local law enforcement to fine and jail vulnerable Hoosiers for sleeping in public, and to strip public funding for proven homelessness strategies for use in constructing punitive homelessness detention camps. That preparation came in handy when Cicero-sponsored legislation appeared first in HB 1662 (Rep. Michelle Davis R-Greenwood), then when that failed SB 197 (Sen. Aaron Freeman R-Indianapolis), then when that failed, HB 1014 (Rep. Alex Zimmerman R-North Vernon). But with the help of thousands of PI and HHNC calls and messages and key support from legislators including Sen. Ron Alting (R-Lafayette), all Cicero efforts to criminalize homelessness were defeated in the 2025 session. However, experience from other states shows that Cicero will be back again soon. To avoid the misguided path of criminalization, Indiana policymakers must instead invest in short- and long-term solutions to increase the supply of safe, affordable housing and proven services for Hoosiers experiencing homelessness.
In addition, for yet another session, none of the bipartisan legislation to enforce Indiana’s habitability standards received a committee hearing. To highlight how Indiana’s refusal to enforce housing health and safety standards artificially decreases housing supply, in March, PI and HHNC partners held a press conference to release The Gap-Indiana 2025 report showing the state now has one of the lowest rates of affordable and available housing for vulnerable renters in the Midwest.
Community Development Resources
Indiana’s legislative session was rocked on April 16 with a revenue forecast to the State Budget Committee showing a $2.4 billion deficit and a gloomy economic outlook report citing tariffs, federal job layoffs, stock market declines, and weakened consumer spending. To mitigate the shortfall, legislators returned April 22 with a final budget agreement that cut an average 5% from state agencies and programs, entirely eliminated others, and scuttled several new proposals.
Unfortunately for Indiana’s community economic development sector, those budget cuts included axing the entirety of Indiana’s $1 million annual appropriation for Housing First programs that had previously been awarded to nonprofits on a competitive basis. In addition, the state’s Individual Development Account program was reduced from $609,945 to $579,448 annually. And unfortunately, a new proposed Home Repair Matching Grant Program that aligned with one of our PI Member Priorities, was in the Senate version of the budget at $250,000 annually, but was cut from the final bill.
However, the final budget did include $25 million for Housing Infrastructure Assistance Revolving Fund from HB 1005 (Rep. Doug Miller R-Elkhart) that legislators have previously acknowledged is meant to subsidize the development of market-rate housing. In light of the cuts to other housing programs, the need is even greater for Indiana to find a way to align available resources to increase the supply and stability of housing for low- and moderate-income Hoosiers.
Asset-Building and Consumer Protections
This session, Prosperity Indiana advocated for two policies to help right-size Indiana’s upside-down state tax system: Newborn Tax Credits and a Low-Income Property Tax Circuit Breaker.
The Newborn Tax Credits in SB 497 (Sen. Greg Walker R-Columbus) saw a great deal of success and momentum, especially for a brand-new proposal. The bill called for replacing the state’s current Dependent Child Exemption Deduction (which provides only $45 in tax relief) with a $500 refundable tax credit to the family of every newborn or adopted child, below 720% of the poverty line. The bill passed the Senate Tax & Fiscal Policy Committee and the full Senate unanimously, but was not heard in the House. Despite that, PI and A&O members had very positive discussions with legislators, setting the proposal up for future sessions.
And while property taxes dominated much of the public discussion during the session, the final legislation did not do much for the low- and moderate-income households and the organizations who serve them. Prosperity Indiana testified in support of including in SB 1 (Sen. Travis Holdman R-Markle) a Low Income Property Tax Circuit Breaker that applies to both homeowners and renters, modeled on Michigan’s Homestead Property Tax Credit. The proposal received support from lawmakers. However, the final bill included no such credit, leaves renters out, and provides no targeted relief to low-income households who bear the highest property tax burden as a share of their income.
On the consumer protections front, Prosperity Indiana and our Hoosiers for Responsible Lending partners were able to hold the line on the expansion of predatory payday lending and make significant improvements on the legislature sanctioning concerning new loan-like product. HB 1174 Charges for supervised loans (Rep. Jake Teshka R-North Liberty) would have created new loan products with excessive fees and interest, from small, short-term loans likely to lead to cycles of reborrowing to large, long-term debt traps like auto loans with unconscionable interest rates. The bill passed the House by a single vote, but with the help of letters from PI and HRL partners, it was pulled from the committee schedule in the Senate and died. HB 1125 Earned wage access services (Rep. Teshka) sanctions Earned Wage Access products that act like loans but are marketed as services. The bill, while still concerning, was improved greatly and passed following testimony from PI and HRL co-chair the Indiana Community Action Poverty Institute to install guardrails for the product, including: fee limits; default $0 tipping; no sharing data with payday lenders; limits on advertising; and maintaining a strong 'free' option.
With the 2025 session of the Indiana General Assembly now behind us, Prosperity Indiana will continue to advocate at the state and federal administrative level and with Congress to advance our Members’ priorities to rebuild housing and economic opportunity for all Hoosiers.
