Thursday, October 25, 2018

Indiana's Proposed "Balanced Budget" Amendment

On the ballot in Indiana next month will be the question of whether to approve a particular proposed "balanced budget amendment" and insert its text into Article X, Section 5 of the state constitution.  In its current form, Article X, Section 5 prohibits any law to be made that would authorize the State of Indiana to contract debt (other than under certain circumstances that Section 5 identifies).

The proposed amendment would (after making the existing text of Article X, Section 5 into subsection (a)) add six new subsections to Article X, Section 5.  The last of these, a new subsection (g), reads, "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."  I assume that this subsection was included to eliminate any risk that a state court would impose or raise a tax (in order to balance an unbalanced budget) while under the mistaken impression that the amended version of Article X, Section 5 had somehow authorized the courts to do so.  That risk is probably worth guarding against -- provided that it is done competently.

However, it has not escaped my notice that the proposed subsection (g) would apply not only to the new subsections created by the proposed amendment but also to the existing contents of Article X, Section 5: "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."

If Indiana voters decide on November 6th to approve this proposed "balanced budget" amendment to Indiana's Constitution, the result will be to render the Indiana's existing constitutional defense against the accumulation of state debt unenforceable and useless.  (Strictly speaking, Indiana's constitutional rule against state debt might be enforceable even if this proposed amendment is approved, in whatever way the General Assembly might "specifically" choose to make that rule enforceable.  However, the rule serves its purpose entirely by limiting the power of the General Assembly, so I think I am justified in saying that giving the General Assembly the power to decide whether the rule can be enforced renders the rule useless.)

If any of you think that I am mistaken about this, I encourage you to show me where my mistake was.  I really would prefer to believe you (if you are right).

5 comments:

  1. Excellent analysis as always Karl, pleased to share. Thank you for all your work on this vital issue of changing the Constitution.

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  2. We have never had a balanced budget requirement in the state constitution. We have a lot of restrictions, more so that other states especially on property taxes.

    Article 10 "Finance"
    Section 5. 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.

    Keys are "No law shall be contracted,"

    Except "casual deficits in revenue"

    The state cannot nor should not issue debt except to pay for a deficit in revenue. It becomes nebulous since how could there be a deficit in revenue they didn't plan on? If they did plan on it is there a competency requirement? Do they get fired? I see nothing to restrain them other than their own personal moral or ethical code. We have been voting in adults for a long time. Yet we still have debt just not as hideous as several failed states.

    There is talk about an influx of migration from failed states, that has had an effect on Texas's political makeup. You won't see that mentioned but that guaranteed change will most likely need such restrictions as this amendment gives up. They did not however put a total straight jacket on the crazy. I am disappointed but not surprised.

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