Indiana’s credit rating gets too much credit

As of a March 5, 2026 announcement, Indiana has once again earned the highest possible rating, AAA, from credit-rating agency Fitch Ratings. This is the 17th year in a row that Indiana has received this rating from Fitch, according to an article on IN.gov. In fact, Indiana has a AAA rating from all three major credit rating agencies.

Governor Mike Braun says of the credit rating, “It’s proof that conservative fiscal management delivers real results.” Secretary of the Indiana Office of Management and Budget Lisa Hershman says the credit rating “enhances our ability to invest in priorities like infrastructure, education, and economic development”. Talking about Indiana’s AAA credit rating in 2025, Governor Braun said the credit rating lets everyone know that Indiana’s financials are “well-managed, fiscally responsible, and focused on delivering growth for Hoosiers throughout the State.”

None of these quotes clearly indicate what this supposed growth, results, or investment priorities include, however. Looking at the data about Hoosiers’ lives clearly indicates a lack of meaningful government support or investment in our well-being. According to the US Census Bureau and Hoosiers by the Numbers, Indiana is on par with, or slightly worse off than, the national average in several key areas. 12.1% of Hoosiers live in poverty, compared to 10.6% of citizens nationwide. The median household income for the United States was $83,730 in 2025, compared with an Indiana household median of only $71,957. In Indiana, 29.5% of Hoosiers aged 25+ have a bachelor’s degree or higher, compared with 35.7% nationwide.

Further considering education, which Secretary Hershman labeled as a priority for the state’s administration, Indiana is currently ranked 19th, dropping from 17th in 2024. This ranking takes into account a number of factors, including graduation rates, cost of higher education, and standardized test scores.

However, this quickly-falling, mid-level ranking doesn't tell a complete story. While in 2025, state legislators touted a 5% school funding increase, adjusted for inflation, schools are actually receiving $100 less per student per year from the state than they were in 2010 (Fuentes-Rohwer, 2025). In fact, in 2021, Indiana schools already received $3,300 less per student per year than the national average (USAFacts, 2026). 

On top of this, a 2025 Indiana law reduces the amount of property tax funding going to public schools by $744.4 million dollars over three years (Fradette, 2025a). A 2023 law required public schools to provide curricular materials to students at no cost to their families; previously, Indiana was one of only seven states to charge public school students for books and other curricular materials. While a positive move for equity and educational access, state lawmakers did not allocate enough funds to cover the loss of curriculum fees, meaning that our already-limited public school budgets had to stretch even further (Smith, 2023). 

Meanwhile, National Assessment of Educational Progress (NAEP) data puts Indiana students slightly ahead of the national average in 2024 (e.g. an Indiana average score of 240 vs. the nation’s average of 237 in 4th grade math), but our percentage of 8th grade students falling into the “Below Proficient” category is increasing; in 2000, 26% of 8th grade students were in this category, compared to 33% in 2024. In reading, the numbers went from 23% of 8th graders testing as “Below Proficient” to 31% in 2024.

Additionally, Indiana’s students of color are consistently being left behind. In 2024, the average performance of Black students in the state was 19-30 points behind the overall state average performance (4th grade reading and 8th grade math, respectively). Though less severe, the trend is similar for students of Hispanic descent, and economically disadvantaged students do significantly worse than their more economically advantaged peers.

These numbers show that, while the state’s achievement scoring as a whole might look reasonable, we are losing those kids most at risk, whether they are academically struggling, racially minoritized, economically disadvantaged, or some combination thereof. The funding choices made by our state government are hurting those kids most in need of a high-quality public education.

Early childcare is a major predictor of academic readiness and success, especially for students from low-income backgrounds (APA, 2023). Arguably Indiana’s biggest struggle regarding children is its access to childcare. In January of 2025, the state stopped issuing new childcare vouchers due to reported inability to fund them. As of September, 2025, the state had 55,000 active vouchers and a waiting list of 31,000 children in need of vouchers. Of those waiting for vouchers, 80% lived under the federal poverty line.

The just-mentioned information from the Indiana Capital Chronicle can be considered in light of a 2024 report from the United States Chamber of Commerce in which they report that “Childcare-related employee turnover and absenteeism costs Indiana employers an estimated $3.05 billion per year” (2.14 billion due to turnover, 906 million due to absences). In fact, Indiana is ranked worst in the nation for access to child care, with just 772 facilities for 850,000 kids from 0-9 years old (Cecil, 2025). That’s 1,101 kids per facility.

The previously-mentioned report from the US Chamber of Commerce also indicated that 36% of low-income parents report having had changes in the last year due to trouble finding healthcare, and 13% of middle- and low-income parents report a plan to leave the workforce in the next year due to concerns about childcare. When asked the question “During the past 12 months, did you or anyone in the family have to quit a job, not take a job, or greatly change your job because of problems with child care for this child, age 0-5 years?” 26.8% surveyed said “yes”, up from 12.2% in 2019. Access to and affordability of childcare is a major concern throughout Indiana, and likely contributes to our faltering educational scores for our children at risk. 

State officials have stated that providing childcare access is too expensive for continued funding; Adam Alson, Director of Indiana’s Family and Social Services Administration, said in 2025, “FSSA has cut contracts, staffing and provider reimbursement rates to make ends meet” (Bonilla Muñiz, 2025).

However, the state had no such qualms about changing the income cap for families receiving private school vouchers. Any family, regardless of how wealthy they are, can now receive scholarships from the state to attend private schools (Fradette, 2025), and there was a ten-fold increase in the use of these funds by families who make more than $200,000 a year between 2023 and 2024 (Smith, 2024).

These vouchers, which largely go to schools that the state says can legally reject students based on their “religion, disability, sexual orientation, gender identity, or academic ability,” cost Indiana taxpayers half a billion dollars in 2024. Of the 70,095 students who enrolled in the voucher system in the 2023-2024 school year, only 2,000 came from families whose household income was less than $50,000 a year. This policy of funneling funding from public schools to private schools will widen disparities in educational access for students across the state, lower the quality of Indiana’s public education, and reduce educational achievement, since 91.3% of Indiana students are enrolled in public schools (Hoosiers by the Numbers).

Additionally, Indiana currently has a budget surplus that is expected to grow by 4.2% this fiscal year and reach $5 billion by next year (Davies, 2025). Clearly, the decision by our state leaders is less about affordability and more about priorities.

Looking beyond children and education, Indiana is also ranked worst in the nation for “natural environment,” says US News and World Report. In subscores, this is found by combining our 38th ranking in air and water quality with our  50th ranking in pollution. While the effect of pollution varies by substance, air pollution is associated with increases in asthma; lowered immunity to viruses; increases in bronchitis; and can cause neurological, reproductive, respiratory ailments, as well as cancer. Water pollution can cause acute waterborne diseases, which include hepatitis, cholera, diarrhea, typhoid, vomiting, skin problems, and kidney problems (Heliyon, 2023).

Broadly, pollution is known to have both short- and long-term health effects. Even with our abysmal pollution record and the risk to the health of Hoosiers, our lawmakers chose to roll back environmental protections in 2026 (SB 277), which will worsen our already terrible environmental record and further damage our natural resources. 

Relatedly, Indiana is 42nd in public health, and 35th in healthcare more broadly (US News and World Report, 2025). We are doing moderately in access to healthcare (22nd out of 50 states), with 8.9% of Hoosiers under 65 lacking access to healthcare, compared to 9.6% nationwide. However, quality of healthcare is a concern, as Indiana ranks 37th out of the 50 states.

Additionally, it is likely that Indiana will slide in the rankings of healthcare access in the coming years.

Between federal spending cuts and federal and state increases in qualification and paperwork requirements, at least 180,000 Hoosiers are expected to lose access to Medicaid funding soon (Ruhman, 2025; Tittle, 2025). Federal cuts alone will mean $31 billion dollars less in Indiana and almost $13 billion fewer dollars going to Indiana hospitals (Tittle, 2025). This will mean increased costs across the board and will likely increase the rate at which hospitals are cutting services or closing. As such, our healthcare system is not doing nearly as well as a 35th place ranking might initially indicate.

In other areas, Indiana is not doing notably better than other states, and in some cases is doing worse; we rank 21st in crime and corrections, though we use incarceration more than the average state (Indiana incarcerates 349 adults and 68 juveniles per 100K residents, compared with national averages of 306 and 41).  We are 40th in economy, including 45th in employment; 33rd in fiscal stability, including 46th in short-term financial stability; 20th in infrastructure; and 16th in opportunity, but 39th in equality. All rankings are provided by US News and World Report; for details on how these are calculated, please visit https://www.usnews.com/news/best-states/articles/methodology. 

Indiana state leaders have used the state’s AAA credit rating as evidence of their excellent leadership. However, a great credit rating means nothing when Hoosiers are suffering and lagging behind the rest of the nation. Where are the “real results” touted by Governor Braun? What about the “growth for Hoosiers” he’s claiming we are seeing? Hoosiers deserve to see improved life outcomes through their tax dollars, not just a ballooning state budget surplus and a nice credit rating.

Hoosiers deserve high-quality education, top-notch healthcare, clean air and water, and so much more. However, our current administration is simply not willing to invest in its people and their lives. Use your vote and your voice to demand better from our elected officials. They work for us using our tax dollars, and they should serve our best interests. Visit MADVoters for all the voter and civic engagement support you may need.