The Indiana legislature had to go to a special session and still barely averted a state government shutdown, to turn in a budget that made no one happy. Leading editorials called the session a "failure."  The state went from the 2008 session in the best financial shape  it has been in several years with a fiscal surplus exceeding $1 billion, to an acrimonious session that was dominated by budget disagreements due to a desire to preserve the state's $1 billion financial cushion , even after using $300 million in reserves. Nonetheless, the session produced some progressive legislation including online voter registration and a fix to the state's broken unemployment insurance system.
Stimulus: The state was allocated a total of $2.4 billion in stimulus fund,s including $1 million for the state fiscal stabilization fund. It dedicated $253.5 million to education programs for children with disabilities; $131 million for home weatherization programs; $1.7 million for the “State Clean Diesel Grant Program,” and $164 million in federal stimulus money to build affordable housing. Indiana had the largest drop in estimated income tax payments  of any state - 64.5%.
Labor and Unemployment Insurance: Indiana Gov. Mitch Daniels signed the unemployment insurance funding bill (HB 1379 ), which will bring in about $1 billion over the next two years, a move which divided conservatives  and the Chamber of Commerce. Even when businesses were flush, they had underpaid taxes into the state's bankrupt fund. That fund is now borrowing more than $7 million every day from the federal government at a current total of $800 million - an amount that is estimated to top $1 billion by the end of the year - also the same amount that the state has preserved in emergency reserves. The new plan will raise taxes on employers but will not cut benefit payments, however the state has yet to implement any of the UI benefit expansions called for in the ARRA.
Education: Although Indiana was one of the few states to increase education funding overall  in its budget, it came at a cost to rural and urban public schools, with spending favoring suburban charter schools. Education cuts at the state level were supplemented with federal recovery funds , meaning that many higher education institutions retained roughly equivalent funding. However, tech and entrepreneurial funding  was slashed in half and a scientific innovation joint project between Indiana University and Purdue University took a heavy blow. Additionally, SB 39  became law, removing the requirement that a Purple Heart recipient must enter active duty service in the armed forces of the United States or the Indiana National Guard after September 10, 2001, in order to qualify for an exemption from tuition and fees at a state educational institution. In a step forward, HB 1479  was enacted, requiring the department of education to develop initiatives focusing on the recruitment and retention of qualified educators from underrepresented populations and teacher shortage areas.
Broadband: HB 1561  requires the economic development corporation to develop a high speed Internet service deployment and adoption initiative, in addition to creating a statewide geographic information system of telecommunications and information technology services.
Health Care: HB 1210  creates and funds for the administration of a mental health services development program to provide incentives to attract psychiatrists, psychologists, psychiatric nurses, and public sector psychiatrists to practice in Indiana. Meanwhile, SB 554  adds additional providers to those who are authorized to screen for breast and cervical cancer when determining an individual's eligibility for participation in Medicaid.
Environment: On a bright note, the legislature passed and enacted a bill (HB 1669 ) establishing a revolving loan fund to help schools install energy-efficient geothermal heating and cooling systems. Unfortunately HB 1348  was vetoed, but it would have required utilities to obtain 15 percent of their power from truly renewable sources by 2025. Worst of all, the Governor signed SB 423 , which permits the Indiana Finance Authority to enter into contracts for the purchase and sale of substitute natural gas (SNG) from coal gasification facilities to regulated energy utilities for delivery to retail end use customers. This bill makes Indiana's natural gas customers the guarantors of a multi-billion-dollar project to produce synthetic gas from coal.
Elections: A notable progressive victory came when the Governor signed HB 1346 , which allows residents with driver's licenses or state-issued ID cards to register to vote online. Meanwhile, Gov. Daniels vetoed SB 209 , which passed unanimously in the Senate , and which had the support of fellow Republican Secretary of State Rokita. It would have allowed the three-member county election boards to create multiple early-voting sites by a 2-1 majority board vote rather than the previous requirement for a unanimous 3-0 vote.
Immigration: Notably, no major anti-immigrant legislation, including the costly and burdensome SB 580  which would have increased employer sanctions, was enacted this session.
Foreclosure: Despite the introduction of a bevy of foreclosure laws , only one bill became law. SB 492  was enacted and creates the opportunity for non-binding settlement conferences between lenders and borrowers, and various notices must be sent and filed before the lender can proceed with the foreclosure suit.
Criminal Justice: The Governor signed a bill increasing the prison term  for anyone who murders or attempts to murder a pregnant woman and causes the loss of her unborn child.
- Employee misclassification: S 385  would have remedied the problem of companies improperly classifying employees as contractors on a public work project and provided for investigations by the department of labor and for various civil penalties
- Family leave: HB 1042  would have allowed employees at smaller workplaces to take up to 6 weeks of unpaid family leave, while protecting an employee's employment and benefit rights and requiring the commissioner of labor to enforce these provisions.
- Consumer protections: In a common-sense solution, HB1529 would have provided that a person may not issue a gift card that is subject to an expiration date or a fee. HB 1213  would have banned smoking in public places.
Citizens Action Coalition of Indiana - Final summary of 2009 Legislative session 
Progressive States - Colorado and Indiana Pass Internet Voter Registration Bills