Indiana, like all states, has a unique early childhood policy landscape that is shaped by economics, demographics, political history, coalitions, and other factors that create a state-specific environment for policy advocacy.
State early childhood policy progress is dependent both on the state’s environment and the numerous efforts—by the organizations listed on this page, other organizations, parents, policymakers, practitioners, and more—who work both independently and collaboratively to achieve wins for young children.
Research shows that family economic security is foundational to children’s overall wellbeing. Research also shows that widespread disparities in opportunity (especially by race) drive wide disparities in outcomes. States with policies that offer strong support to young children and their families are more likely to see 1) declining numbers of children in low-income households and 2) low racial disparity among those children.
Young Children in Low-Income Households: Declining
Approximately 41% (305,000) of the state’s children 0-8 live in households below 200% of the Federal Poverty Level (2022). This number represents a decrease from 44% (325,000) in 2017.1
Racial Disparity Among Young Children Living in Low-Income Households: High
Black, Hispanic/Latino, and/or Native children aged 0-8 are significantly more likely to be living in households below 200% of the Federal Poverty Level than are Asian and non-Hispanic White children.2
State General Fund Appropriations: Growing
Indiana’s governor signed the state’s biennial budget for fiscal 2026-2027 in May of 2025. Total appropriations from all funds are $53.46 billion in fiscal 2026 and $54.71 billion in fiscal 2027. Total general fund appropriations are $22.77 billion in fiscal 2026, a 1.0 percent increase from fiscal 2025’s estimated level, and $22.90 billion in fiscal 2027, a 0.56 percent increase from fiscal 2026. Total general fund revenues are forecasted to grow 2.3 percent in fiscal 2026 and 0.1 percent in fiscal 2027. The state projects a structural surplus of $424.6 million in fiscal 2026 and $270.2 million in fiscal 2027. Total general fund combined balances are projected at $2.25 billion (or 9.8 percent of current year resources) in fiscal 2026 and $2.30 billion (or 10.0 percent) in fiscal 2027.3
Largest Per Capita Revenue Sources (after federal transfers) (FY 2021):4
(Charges are public payments connected with a specific government service, such as tuition paid to a state university, payments to a public hospital, or highway tolls. Indiana uses all major state and local taxes.)
State Budget Rules:4
Indiana uses a biennial budget. The legislature is not required to pass a balanced budget, nor is the governor required to sign one, and deficits may be carried over into the following year. However, the state has budget rules that require lawmakers to balance revenues and expenditures. Indiana further limits spending growth through a statutory formula, but the spending cap may be overridden by a simple legislative majority. The state limits total authorized debt incurred by the state but not debt service.
There is no permanent state funding stream—such as lottery revenue, nicotine tax, or trust fund distributions—dedicated by statute to early childhood supports.9 (Examples of states with such funding in place can be found in the Alliance’s Revenue and Early Childhood Finance resource center.)
Political Alignment: Aligned Republican
During the 2025 session, the state’s Senate and House were both Republican controlled. The state’s Governor was also a Republican.6
Types of Common Ballot Measures Available: One
Early Childhood Policy Advocacy Organizations Include:
Early Childhood Policy Advocacy Multi-State Initiatives Include:8
Highlights from the state’s early childhood policy advocacy community include:9
House Bill 1001 funded the state’s On My Way Pre-K program and a variety of early care and learning activities, including $147M in new “hold harmless” funding to ensure continuity for families currently receiving CCDF vouchers. Representing a relatively large increase in state funding, the hold harmless funding will allow all current recipients of CCDF vouchers to maintain their awards. Expansion of the program in the state had been funded through American Rescue Plan dollars and there was no longer term plan for sustainability. Potentially 30,000 kids were at risk of losing CCDF absent this investment. There was significant advocacy in the state for this measure. Advocates estimated that roughly 30,000 vouchers could be at risk if the state did not make some additional investment, so they developed grassroots messaging, worked closely with partners to deploy data on the capacity that was potentially at risk if funding wasn’t forthcoming, and held a Child Care Day at the Statehouse event to raise awareness of the issue for legislators.
Senate Bill 463 included an extension of a tax credit for businesses that want to open on-site or near-site child care facility for the children of their employees. The tax credit is extended through 2027.
House Bill 1427 included two new property tax exemptions relating to child care. The first is a partial property tax exemption for the property of a business that uses some of its space for an on-site child care facility. The second is a property tax exemption for for-profit child care centers to mirror the one available to nonprofit operators.
Indiana’s governor issued an executive order expanding paid family leave for state employees who have new children, adopt a new child, or who need time off for recovery after a birth or miscarriage. The executive order expands a popular paid leave program for state employees to include up to 150 hours of paid leave for full time and 75 hours of paid leave for part time employees.
House Bill 1253 included language calling for the creation of a multi-site licensure category for child care providers. The proposal in HB 1253 will allow child care providers that operate more than one location to have a streamlined licensure process but which, crucially, will still allow for individual site-level inspection and enforcement. This bill should allow providers an easier pathway to expansion while not sacrificing the state’s critical role in oversight.
Advocates also successfully defended child care ratios in Indiana. The final version of Senate Bill 463 included language that ties Indiana’s child/staff ratio and maximum group sizes for child care to the average ratios and group sizes of surrounding states and requires the state to re-set the ratios and group sizes each calendar year. The bill’s ratio/group size language, as originally introduced, would have tied the state’s ratios/group sizes to the least restrictive of its neighboring states, rather than the average. Advocates worked to highlight the dangers of changing ratios and provided data to show the correlation between rates of injury/death and relatively lax ratios/group sizes. Advocates worked closely with female legislators in both parties who had concerns with changing the ratios. The final language, in effect, preserves current requirements.
Since 2009, our lead ally in Indiana—United Way of Central Indiana—has convened a statewide coalition of early childhood educators, business leaders, and philanthropic organizations aimed at improving the quality of Indiana’s early childhood education system and increasing access to programs. Early Learning Indiana has been a key partner in these efforts. With advocacy aimed at both the Governor’s office and the Indiana General Assembly, the coalition successfully turned a five-county pilot into a statewide program for pre-k.
Early Learning Indiana & United Way of Central Indiana are working to advance early childhood policies in several areas that align with the Alliance’s birth-through-eight policy framework:
Child Care
Child Care Workforce
K-3 Education
Preschool and Pre-K
Child Welfare
Early Intervention (Age 0-3)
Infant & Child Health
Maternal Health
Family Economic Security
Early Childhood Finance and Cost Modeling
Early Childhood Governance
Click here for more information on advocates’ policy agenda.
Indiana’s new Early Learning Access Index visualizes the factors that impact access to high-quality early care and education opportunities beyond the county level, down to individual census tracts, including in rural communities.
NOTES:
1 Kids Count Data Center, Annie E. Casey Foundation, Children Ages 0 to 8 Below 200 Percent Poverty, January, 2024.
2 National Center for Children in Poverty, Children Ages 0 through 8 Below 200 Percent Poverty, October 2024, NCCP analysis of ACS 5-Year Estimates – Public Use Microdata Sample 2018-2022.
3 National Association of State Budget Officers, Proposed and Enacted Budgets, FY 2026.
4 Urban Institute, State Fiscal Briefs, April 2025.
5 Alliance for Early Success, State Examples of Dedicated Funding Streams, 2025
6 National Conference of State Legislatures, 2025 State & Legislative Partisan Composition, January 31, 2025.
7 Ballotpedia, Ballot Measures by State, Kids Count Data Center, 2025.
8 Alliance for Early Success, Multi-State Initiatives for Early Childhood Policy Advocacy, July, 2024.
9 Alliance for Early Success, State-Wide Advocacy Highlights Survey, April-October, 2025.
