Evansville health department to weigh staffing cuts after state slashes Health First Indiana funding

Evansville City Board of Health members were told the state has cut Health First Indiana (HFI) funding for local health departments by 73.3% for fiscal years 2026 and 2027, and staff urged the board to begin scenario planning to avoid abrupt service reductions.

The board heard that HFI’s statewide appropriation is being reduced from roughly $150,000,000 per year to about $40,000,000, and that the local share communicated to the department is $1,120,000. Board members and staff said the combination of that reduction and limits on property-tax levy increases under Senate Bill 1 will sharply restrict available revenue for county services.

Why it matters: Health department staff said the cuts threaten personnel and ongoing programs that the department currently supports, including items that county council previously shifted onto HFI funds. Staff described two near-term steps: convene a finance-committee meeting to present two prioritized budget scenarios and slow nonessential spending while the department lines up funding for June to avoid immediate layoffs.

Board discussion and next steps

Board members asked staff for scenarios that separate statutory obligations from discretionary programming. Staff said a priority-based approach should identify programs required by statute first, then examine smaller programs and grants. Maria, who said she serves on the Healthy Futures Foundation board, told the board she would seek more detail from the state at a meeting the next day and report back.

Staff recommended a finance-committee meeting within two to three weeks to review: 1) a scenario that preserves only statutorily required services and 2) a scenario that preserves additional prioritized programs. The board agreed the meeting should include granular grant end dates, the timing of HFI reductions, and line-item options for temporary hiring freezes, deferred capital expenditures and targeted fee adjustments.

Revenue options and limits

Staff described modest fee increases as a marginal revenue source: birth and death certificate fees (currently $15 in-county) and inspection fees bring small annual revenue (staff estimated the department’s fee revenue at roughly $780,000). The department noted statutory limits and political constraints on raising certain business-related fees and advised any increases be phased over two to three years. Board members emphasized that fee increases would not fully replace lost state funding and said they would focus first on staffing and core services.

Timing and immediate constraints

Staff said they have authority to spend remaining HFI funds through June; the immediate deadline means the department must identify funding or personnel changes by that time to avoid abrupt layoffs. The board directed staff to produce two written budget scenarios and to convene the finance committee to review them.

Ending

The board scheduled the finance-committee meeting and asked staff to prepare statutory prioritization, a list of grants and their end dates, and options for phased fee changes. Members urged proactive outreach to local partners and the community to explain likely service changes resulting from state funding reductions.