A proposed balanced budget constitutional amendment could help Indiana maintain its stellar credit rating for years to come, Standard & Poor’s said in a report Tuesday.
The credit rating service renewed the state’s AAA credit rating, the highest one available.
“Indiana continues to stand out because of our strong economic climate,” Gov. Mike Pence said in a written statement about the report. “We’ve lowered taxes, held the line on spending, and maintained our reserves, all of which help Indiana keep its competitive edge.”
In the report, Standard & Poor’s applauded the state for its fiscal responsibility and said the proposed amendment would “strengthen Indiana’s government framework.”
The report scores Indiana’s current government framework at a 1.2 out of 4.0, with 1.0 being the highest score possible.
Other scores were as follows:
— Financial management:1.5;
— Budget management framework: 1.5;
— Budgetary performance: 1.1; and
— Indiana’s economy: 2.4.
Since 2010, Indiana has maintained a AAA credit rating with all three major credit agencies, Standard & Poor’s, Moody’s and Fitch Ratings.
The balanced budget amendment, Senate Joint Resolution 9, would prohibit state budget appropriations from exceeding state revenues. However, the restriction could be lifted with a two-thirds vote of the House and Senate.
Pence made the amendment a part of his legislative agenda, although Indiana lawmakers have generally passed balanced budgets, except during economic downturns or when trying to cut taxes to reduce a big state surplus.
“As we look to the future,” Pence said, “I urge the General Assembly to pass a balanced budget amendment in the coming days to ensure Indiana’s credit rating and overall fiscal reputation remain strong.”
The amendment has already passed the Senate and could be voted on by the House on Wednesday.