Indiana passed a spending cap in 2002 and has limitation on expenditures, although this can be overridden by a simple majority vote. The spending cap, passed in Indiana Code 4-10-21, was enacted by legislative vote and is a statutory limitation on expenditures. The expenditure is set by a 3.5% growth rate for the first two years, then the six-year average of personal income growth thereafter, and adjustments to changes in revenues due to changes in tax law. It allows numerous spending exemptions and can be overridden by a simple majority vote.
What keeps Indiana spending so close to a hypothetical TABOR are its strong constitutional limits on expenditures. Indiana passed strong balanced budget constitutional amendment in 2018. This amendment, Article 10 Section 5, limits the total amount of budget appropriations enacted by the Indiana General Assembly for a biennial budget may not exceed the estimated revenue of the state biennial budget period. Indiana also has one of the strictest debt limits in the country, Article 13 Section 1, banning the state from incurring any debt unless during times of “war, foreign invasion, or other great public calamity” the majority of property owners “in number and value” can petition the government to take on public debt.
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