The first draft of a balanced-budget amendment to Indiana‘s constitution is ready for a committee hearing in the Senate.
Governor Pence called for a balanced-budget amendment in this year’s State of the State address.
The constitution currently prohibits going into debt, but Tax and Fiscal Policy Chairman Brandt Hershman says the 19th-century wording is essentially meaningless.
Hershman‘s amendment says the state can‘t spend more than forecasters estimate it would take in during the two-year budget.
If those estimates prove optimistic and the state takes in less than expected, the overage would be deducted from the allowable spending in the next budget.
Hershman says the proposal also allows legislators to waive the balanced-budget requirement on a two-thirds vote.
"It is challenging to get two-thirds of both bodies of the legislature to agree on fiscal issues," says Hershman. "I think that provides a worthy barrier to cause any future legislature to stop and thoughtfully consider what they're doing."
Hershman says some aspects of the amendment still need to be ironed out as it moves through the Senate and House, including the conditions under which the state could dip into the surplus.
If the amendment passes this year, it would have to be reapproved in the same form in 2017 or 2018 before going to voters for final ratification.
