The Municipal Corporations Committee of the City Council of Indianapolis convened on September 17, 2025, to discuss the Health and Hospital Corporation's (HHC) budget proposals for the upcoming fiscal year. The meeting focused on the challenges and strategies surrounding HHC's financial sustainability, particularly in light of projected deficits.

The session began with an overview of HHC's governmental enterprise budgets, highlighting a significant projected deficit of approximately $25 million for both the general fund and the Eskenazi Health Fund. HHC officials emphasized the importance of maintaining a cash reserve of 240 days to navigate financial fluctuations and uphold a strong credit rating, currently rated Aa2 by Moody's.

To address the anticipated financial shortfall, HHC has set a target of achieving $450 million in operational improvements over the next five years. This goal is part of a broader strategy to enhance financial stability, with divisional leaders tasked to identify cost-saving measures. Notably, HHC reported exceeding its improvement targets for the 2026 budget.

The proposed budget for 2026 includes a general fund allocation of $406 million, alongside various other funds, with the majority remaining balanced except for the general and Eskenazi Health funds. HHC anticipates reducing its deficits by half by 2027 and aims for balanced budgets across all funds by 2028.

Key challenges discussed included a significant reduction in Health First Indiana funding, which dropped from over $23 million to an estimated $6 million, impacting community grants and overall service delivery. Additionally, HHC faces a $38 million loss in state healthcare funding for the indigent and a reduction in hospital reimbursement payments.

Despite these challenges, HHC is exploring opportunities to maximize tax levies and advocate for additional funding at the state and federal levels. The committee noted that while HHC is not levying new taxes, it has increased its advertised maximum levy for the general fund by 3.7% for 2026.

In conclusion, the meeting underscored HHC's commitment to financial sustainability amid significant funding challenges. The committee will continue to monitor the budget's progress and the impact of state funding changes on HHC's operations. Further discussions are expected as the council prepares for the upcoming fiscal year.