Franke: The Balanced Budget Amendment

October 29, 2018

by Mark Franke

One of the strengths of American representative democracy is the requirement in most states for the voters to approve amendments to their state constitutions. This election cycle alone can boast of 37 states with 167 amendments and other initiatives, those in Florida and North Carolina getting the most press coverage and producing the most political fireworks.

A lot of money is being spent for and against these initiatives, with California (of course it is California) leading with over $300,000,000 being spent fighting for and against that state’s initiatives, all 17 of them.

Maybe so much money needs to be spent because of the complexity of the issue or the obfuscation of the writing. Using the Flesch-Kincaid Grade Level (FKGL) scoring system for determining readabiity, the average 2017 ballot measure required 20 years of formal education to read and comprehend. That’s well into grad school, folks.

Meanwhile back here in Indiana, there is only one such amendment we are asked to approve or disapprove. Called the “Balanced Budget Amendment” to make plain its purpose, the text appears at first glance to be self-explanatory:

“Shall Article 10, Section 5 of the Constitution of the State of Indiana be amended to require the General Assembly to adopt balanced budgets for state government that do not exceed estimated revenues unless a supermajority of two-thirds of the members of the House of Representatives and two-thirds of the members of the Senate vote to suspend the requirement?”

Seems clear enough, but the language scores at a college graduate level by the FKGL system. So what am I missing here?

First off, why is this necessary? The Indiana Constitution in Article 10, Section 5 prohibits borrowing by the state except for “casual deficits in revenue,” whatever that means, and for such other items as paying interest on the state debt, repelling invasion, suppressing insurrection and for providing for the public defense in the event of hostilities. This doesn’t seem to present a problem since we haven’t been invaded since Confederate Gen. John Morgan raided the southeast part of the state in 1863.

Then there is the whole issue of the funding of state pension contributions, which apparently is part of the amendment but not mentioned in the ballot language. I thought Indiana, while not perfect, was among the least bad of all states for underfunding state employee pension funds. Note I said “least bad” not “good.”

Of course the General Assembly is giving itself an out by allowing this amendment to be set aside if two-thirds of both houses votes to do so. Since the amendment passed both the 2015 and 2017 legislative sessions by margins of approximately 90 percent in favor, the legislators must not see this as a significant obstacle.

Finally, it says nothing about taxes which can always be raised to balance the budget. Lifelong Hoosiers such as this writer can remember when the state gross income tax rate was raised from 2 percent to 3 percent as a “temporary” measure. It is now 3.23 percent plus another percent or two imposed by most of the counties. I seem to recall the general sales tax increasing from 2 percent to 4 percent during the first oil crisis in 1973. It is now 7 percent plus whatever local taxing districts can manage to tack on to finance stadiums.

Or am I too cynical?

I do seem to be getting more and more that way. But let me offer just one example in defense of my attitude. The Indiana Constitution also requires that bills passed by the General Assembly “shall be confined to one subject and matters properly connected therewith.” This is routinely violated by the legislature, and the constitutionality of these multi-subject bills was challenged in a 1995 case before the Indiana Supreme Court. (In the interest of full disclosure, the plaintiff in this suit was a member of the Indiana Policy Review Foundation for which I write columns like this one.)

The Court majority ruled that the plaintiff had no standing and dismissed the case. Even the dissenting opinion, which allowed that the taxpayer has legal standing to challenge the constitutionality of government acts, essentially said it still didn’t matter in this case because the Court had already approved multi-subject bills in previous rulings.

Do you see why cynicism is so hard to suppress these days?

Mark Franke, an adjunct scholar of the Indiana Policy Review, is formerly an associate vice chancellor at Indiana University-Purdue University Fort Wayne.



Comments...

Leave a Reply