Making Democracy Work

Alerts from Voter Service Committee

Issues in upcoming elections on which voters will be asked to vote

November vote on amending Indiana's Constitution

(posted August 14, 2018)

This November, Hoosier voters are being asked whether the Indiana Constitution should include a balanced budget mandate. State officials of both political parties have long followed that practice in accordance with the constitution's general prohibition on most types of state debt. Indiana Public Question 1 is a balanced budget amendment. It would modify Article 10 Section 5 of the Indiana Constitution. In addition to requiring that the state legislature enact a balanced budget (expenditures could not exceed the expected revenue for the budget period) it requires the following:

  • Sufficient money to fully fund withdrawals from State pension funds,
  • A 2/3rds vote of both chamber of the legislature would be required to suspend the requirements of a balanced budget and funding pensions for a budget period,
  • Forbids court-ordered tax increases without the legislature's approval. During the Senate's debate on the amendment, Senators Hershman and Tallian offered the following viewpoints on the necessity of the amendment: Hershman: "Enshrining this type of fiscal discipline into our constitution is exactly the kind of good governance that will not only protect and promote what we're doing right now, but will prevent us from falling into the same fiscal death spiral as places like our unfortunate neighbors to the west (Illinois)." Tallian: Suggested Hershman's proposal is imprecisely worded and could effectively prevent the state from ever spending its $2 billion reserve fund or require billions of dollars be spent immediately to prop up state pension accounts if a stock market dip reduces their funding levels. "I do not believe that we need this as a constitutional amendment."

Full of Article 10 Section 5 with the proposed additions underlined.

Section 5. (a) No law shall authorize any debt to be contracted, on behalf of the State, except in the following cases: to meet casual deficits in the revenue; to pay the interest on the State Debt; to repel invasion, suppress insurrection, or, if hostilities be threatened, provide for the public defense.

(b) The following definitions apply to this section only for purposes of the limits on the State budget under this section: (1) "Revenue" means all income received by the state general und and all other state funds, excluding the proceeds of bonds or other loans.

(2) "Expense" means the ordinary operating costs of State government, including any debt service payments made during the biennial budget period. (c) The total amount of expense appropriations enacted by the General Assembly for a biennial budget may not exceed the estimated revenue of the State in the biennial budget period. (d) A State budget enacted by the General Assembly must appropriate money for the State's prefunded pension funds in the amount necessary to actuarially fund the accrued liability of all such pension funds during the budget period. (e) If expenses exceed actual revenue received by the State when reconciled at the close of a biennial budget period, the subsequent biennial budget must subtract any shortfall from the projected revenue available for that subsequent biennial budget. (f) The requirements under subsections (c) and (d) may be suspended if at least two-thirds of the members of the House of Representatives and at least two-thirds of the members of the Senate vote to suspend the requirement. (g) A court that orders a remedy pursuant to any case or controversy arising under this section may not order any remedies other than a declaratory judgment or such other remedies that are specifically authorized by the General Assembly in a law implementing this section.

League Position

The League of Women Voters of Greater Lafayette does not have a position on this amendment. We urge voters to do their own research and vote yes or no on the amendment.