Indiana state legislators will be required to create a balanced budget every two years after an amendment to Article 10 Section 5 of Indiana’s constitution passed Tuesday.
However, the amendment will most likely bring little change to state functions, said Justin Ross, an associate professor of public finance at IU.
A balanced budget means spending will not exceed the state's revenue. The requirement can be suspended by a two-thirds vote from the Indiana House and Senate.
Ross said there will be little short term effect on the state budget. However, there are two possible effects for the long term.
One possible result of the amendment is in times of economic upheaval when revenues are down, the state is protected, Ross said.
The second plausible effect is protection if the current norms of balancing budgets were eroded. Ross said this was a possibility due to the potential erosion of social norms such as civility in recent years. The amendment that was passed is designed to be a guard against such economic change.
The amendment passed with 71.9 percent voting yes and 28.1 percent voting no.
