Federal funding uncertainty eliminates Indiana programs, threatens others

Hurricanes Sandy, Helene and Milton. The Surfside condo collapse in Florida. Maui’s wildfires. Floods in Kentucky.

All of these disasters had Hoosiers on the ground rescuing victims as part of Indiana Task Force One, a highly trained team of first responders and one of 28 federal squads across the country.

But President Donald Trump’s proposal to close the Federal Emergency Management Agency and shift rescue and recovery responses to the states puts Task Force One in a precarious position.

The decision is just one of several that has fueled funding uncertainty for universities, state and local programs, watershed projects and environmental needs around the state.

“We’re not even sure — will FEMA be dissolved? Will FEMA be reorganized where this program will stay under FEMA? Will we go to a different federal agency? There’s a lot of questions that, quite frankly, we can’t answer right now,” said Thomas Neal, Task Force One’s division chief.

Generally speaking, the city of Indianapolis covers the expenses of Task Force One with the promise that FEMA will reimburse the entity for qualifying expenses, such as payroll, during search and rescue missions. Daily expenses are covered by a $1.3 million FEMA readiness grant and funding from the city.

But Indiana, as a state, doesn’t spend any money on the program — and the General Assembly has rejected multiple attempts to add a budget line item. Indiana’s sole contribution was the $150,000 it spent — with $150,000 from Indianapolis and $300,000 from FEMA — to start Task Force One in 1992.

Sen. J.D. Ford offered a budget amendment to allocate $1.5 million for Task Force One and won over six Republicans earlier this year, but failed to get enough support from the Republican supermajority. The Indianapolis Democrat said he was disappointed by the result.

“In my mind, these are first responders who are actually doing a service to our state and we’re not giving them a nickel,” said Ford.

More about Task Force One

FEMA requires that Neal maintain at least 210 people on a rotating schedule who are ready to deploy at a moment’s notice. Two-thirds of the unit is made up of firefighters with 380 hours of training in specialized rescue techniques for floods, structural collapses and more.

The other members are physicians, structural engineers, canine handlers, logistics operatives and even licensed CDL drivers who transport equipment like rescue boats, ready-to-eat meals, water tanks and dry suits.

Neal, the division chief, has been part of the team since 1994. The team has only three full-time members, including himself, and a few part-time employees. With the additional state funding, Neal said the team would have made its part-time logistics position into a full-time effort — an important role during the busiest part of the year: hurricane season, which started on June 1.

He estimated that Task Force One had maybe 70 total deployments in the history of the program, but “since 2016, it’s pretty much been nonstop.”

“We’ve had multiple deployments every single year. Sometimes we don’t even hardly get back and get the equipment cleaned up and we’re being pushed out the door again,” Neal said.

Indiana dependency on federal funding

An analysis from the Indiana Fiscal Policy Institute found that total federal funding flowing into Indiana is $177 billion — equivalent to more than $25,000 for each Hoosier resident.

Indiana is the third most reliant state on federal cash – behind Louisiana and Mississippi according to the left-leaning Center on Budget and Policy Priorities.

The federal agency that spends the most in Indiana is the U.S. Department of Health and Human Services, totaling $126 billion. Next is Social Security with $32 billion.

n terms of where the money goes in Indiana the top two categories are Medicare and individuals — accounting for $160 billion. The state comes in third at $7.5 billion. Other categories include $1.2 billion for public higher education; $1.1 billion to nonprofits and $558 million for city governments.

This funding uncertainty complicated the state’s efforts to draft a two-year budget for the 2025 legislative session, especially after a dismal revenue forecast predicted the state would take in $2 billion less than expected over the biennium.

The governor’s office remains optimistic about Indiana’s ability to weather any funding uncertainty, however.

“Because of Gov. (Mike) Braun’s direction to do more with less, our state is in a great position to handle any reductions in federal spending. For years, the Biden administration grew our national debt and threw federal dollars around with few guardrails. States now need to demonstrate responsibility and manage their budgets well, and Indiana is leading the way,” said Press Secretary Griffin Reid.

Ford, on the other hand, tied the state’s budget woes to the actions of Trump and Congress.

“We had to trim the state budget because of the instability that Washington (D.C.) was creating for states and for us,” said Ford. “I think not only of first responders, but I think business owners, our farmers and everyday Americans and Hoosiers want stability and it’s just not what we’re getting.”

The federal funding uncertainty may have only just begun. Here’s three examples of cuts so far:

The Department of Energy Industrial Demonstration Program

In May, the U.S. Department of Energy terminated 24 projects worth more than $3.7 billion with the Office of Clean Energy Demonstration. The initiative was designed to modernize U.S. industrial facilities and incentivize clean manufacturing. U.S. Secretary of Energy Chris Wright alleged the projects “failed to advance energy needs of American people … and would not generate a positive return on investment of taxpayer dollars.”

This cut impacted two Indiana projects working to decarbonize their facilities.

In 2024, Heidelberg Materials North American was selected to receive $500 million in funding from the U.S. Department of Energy for a major carbon reduction project at a cement plant in Mitchell.

Former Gov. Eric Holcomb at the ribbon cutting ceremony for the plant called the award “the most sustainable operation in the history of the world in terms of building cement.”

Ash Lauth, a senior campaign strategist with nonprofit advocacy group Industrious Labs, said the Mitchell Plant was a one-of-its-kind carbon cement facility and was expected to offer around 1,000 construction jobs.

“If I was living around that plant, I would be gutted right now,” Lauth said. “This is real people, real money, I hope Indiana senators think about this and that Indiana voters care about it.”

Lauth said Heidelberg has already sunk a lot of money into the project and hopes that they go through the appeals process. She said that the cut is just another setback but not a “nail in the coffin.”

“Killing these projects means more emission, more pollution, more people getting sick,” She said. “Now we are handing over a competitive environment to countries around the world and leaving the U.S. behind. That is cause for sorrow.”

Kraft-Heinz facility in Kendallville also received a $170 million federal grant to install an industrial heat pump — which was part of a plan for up to 11 facilities across the country.

According to Lauth, the Kraft-Heinz grant would have created an estimated 500 construction jobs. By upgrading the plant with energy efficient manufacturing equipment, the facility sought to eliminate a major source of air pollution and provide cleaner air to nearby residents.

Hits for farmers

In February, the Allen County Soil and Water Conservation District was still waiting on $400,000 in federal reimbursements — funds that were supposed to arrive in January but weren’t fully released until mid-April. During that time, the district had already spent nearly $300,000 on programs, salaries, education efforts and water quality monitoring, expecting federal reimbursement.

Instead, the funding freeze — and federal court holdup — left the district in turmoil. The delay not only hurt operations but forced Director Dr. Julie Davis Good to make difficult decisions, she said.

One Watershed Project Manager, who led much of the field and on-site conservation work, was terminated. Another was hired in December but could not begin until early June due to prolonged federal clearance. At one point, the nine-member team was down to just three full-time employees.

“Farmers are the ones hurt,” Good said. “Obviously our office is in turmoil but farmers can’t get anything that we promised them.”

The situation escalated in March, when the Indiana Association of Soil and Water Conservation Districts announced a pause in programs and staff due to a lack of previously promised federal funding. Like many districts, Allen County operates by spending grant money upfront and then billing the federal government for reimbursement.

Without staff and program funding, the district lost the ability to deliver soil testing, water quality monitoring and farm support.

Now, the organization hopes to mitigate funding uncertainty with support from local corporations, foundations and sponsors. Good said the grant is still tied up in the courts, jeopardizing new innovative conservation projects they had planned.

“Growing up I was told, ‘who controls your food controls you,’” Good said. “We are unable to produce our own food because now we are controlled by them … that is not the American way”

Cuts to higher education

Universities and colleges have also taken a hit, particularly research grants from the National Institutes of Health. Trump has also targeted specific higher education institutions in blue states like California and Maine as well as elite universities like Harvard.

Indiana University didn’t respond to a request for comment about funding uncertainty, but is one of 60 universities being investigated by the Trump administration for antisemitism. In 2024, it received just over 70% of its research funding from the federal government, or more than $552 million, mostly dedicated to its medical school.

Another cut impacts the Congressionally Directed Medical Research Program, which studies treatments for mild traumatic brain injuries. The IU School of Medicine received $715,000 from that fund in 2023.

Other grants, including those distributed by NIH, are currently being litigated. Indiana received $407 million from NIH in 2024.

Purdue University’s LASER PULSE program — which helps the federal government research international development — has been frozen. The school had a dedicated page documenting such cuts and other funding uncertainty.

The Indiana Capital Chronicle is an independent, nonprofit news organization that covers state government, policy and elections.