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Constitutional amendment for balanced budgets on state ballot

October 17, 2018

In addition to voting in federal, state and local races this fall, Hoosier voters will also have a say in a proposed amendment to the Indiana Constitution.

The amendment would prohibit the Indiana General Assembly from adopting a budget that spends more than the state earns in revenue.

All constitutional amendments have to be approved in two separate sessions of the General Assembly and approved by a majority of voters. The Indiana Legislature overwhelmingly approved the measure in 2015 and again in 2017, which sent it to the ballot this year for voters to weigh in.

“It’s a really big issue that's received no attention,” said former Republican state Sen. Brandt Hershman, who authored the amendment. “I don’t think anybody is aware that this is on the ballot.”

He said he wasn’t aware that Indiana didn’t have any such protection until then-Gov. Mike Pence brought it to his attention in 2015 and made it a priority for the state.

“It puts Indiana in a very solid position for the future,” Hershman said. “In terms of really laying the bedrock for the future success of the state, it’s one of the most important things I achieved in 18 years in the General Assembly.”

Hershman said a majority of other states have similar balanced budget requirements in their constitutions as a way to protect the state from irresponsible spending. Indiana’s amendment won’t necessarily change what the state is doing, because lawmakers already adopt balanced budgets, but it will make it a requirement in the future.

“Indiana has had balanced budgets but only because of the fiscal leadership,” Hershman said. “It is not a constitutional requirement.”

Indiana’s constitution does prohibit the state from having capital debt, but the state uses the Indiana Finance Authority, a quasi-government agency, to incur debt.

The proposed amendment includes an emergency clause that would allow two-thirds of lawmakers in both chambers to suspend the requirement. It also requires the state to make up for any shortfalls in subsequent budgets should expenses exceed actual revenues when the budget is eventually reconciled. The General Assembly passes state budgets every two years based on projected revenue from sources like taxes, permits and licenses.

Hershman said he thinks the measure will pass overwhelming, “because the people I talk to, fiscal responsibility is a non-partisan issue.”

“You can argue over your spending priorities,” Hershman said. “But I think there is broad consensus among the Hoosier public that we need to live within our means.”

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