Indiana lawmakers are moving forward with plans to add a balanced budget amendment to the state constitution that would prohibit the state from spending more than it earns in revenue.
The Indiana General Assembly passed a balanced budget amendment resolution in 2015, starting the process for the ballot measure. If legislators approve the proposal again this year, the amendment could be put on Hoosier voters’ ballots for approval in November 2018.
Indiana Senate Republicans put the proposal on their list of legislative priorities for the current legislative session. The first hearing for the bill is scheduled for Tuesday morning.
“We are prepared to promote the language that passed overwhelmingly in the last session of the Indiana General Assembly to ensure a fiscal framework of self-discipline for now and the future so Indiana has the right resources and fiscal climate to continue to thrive,” said state Sen. Brandt Hershman, R-Buck Creek, an author of the proposal.
Hershman said most states are required to pass balanced budgets. Indiana’s constitution already restricts the state from taking on debt.
But former Gov. Mike Pence ignited the calls to pass a balanced budget amendment to the constitution during his State of the State speech in 2015, which some Democrats criticized as an unnecessary “parlor trick” pushed for political reasons.
"We're pretending to solve a problem that doesn't exist in order to write an ad," Democratic Rep. Ed DeLaney of Indianapolis said during the 2015 session. "This does not improve our constitution, does not improve our behavior, and is a waste of legislative time."
The Legislature ended up passing the measure, with the House approving it by a vote of 84-15 and the Senate approving it 43-6.
The General Assembly passes a state budget every two years based on projected revenue from sources like taxes, permits and licenses. The resolution under consideration provides that, if a budget passed by the Legislature has expenses that exceed actual revenue when the budget is eventually reconciled, "the subsequent biennial budget must subtract any shortfall from the projected revenue available for that subsequent biennial budget.”
The balanced budget amendment at hand also has an escape clause in case of an emergency: Two-thirds of the General Assembly can vote to use emergency spending measures.
Hershman said the state needs a balanced budget amendment “so we have the ability to invest in priorities."