INDIANAPOLIS (WOWO): 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 his 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 overoptimistic, the overage would be deducted from the allowable spending in the next budget.
The proposal lets legislators to waive the balanced-budget requirement on a two-thirds vote. Hershman says that‘s high enough to be hard to achieve, while low enough to allow going outside revenue estimates in an emergency. 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.