To expound on the example I mentioned above, where my Dad was talking about a constitutional amendment to Indiana's constitution as a life lesson:
The amendment in question was one that affected the ability of Indiana to spend money. (This was back in the late 1970s.) In Dad's view, it would have allowed Indiana to spend more than it took in in taxes. Indiana already has it written into its constitution (Article 10 Finance, Section 5) that Indiana is not allowed to spend more money than it takes in except under certain, narrow conditions...and then only for a limited time. The wording is thus:
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.
Further, Article 13 Indebtedness, Section 1 states:
No political or municipal corporation in this State shall ever become indebted, in any manner or for any purpose, to an amount, in the aggregate, exceeding two per centum on the value of the taxable property within such corporation, to be ascertained by the last assessment for State and county taxes, previous to the incurring of such indebtedness; and all bonds or obligations, in excess of such amount, given by such corporations, shall be void: Provided, That in time of war, foreign invasion, or other great public calamity, on petition of a majority of the property owners in number and value, within the limits of such corporation, the public authorities in their discretion, may incur obligation necessary for the public protection and defense to such amount as may be requested in such petition.
Seems pretty clear, right?
And yet, there has been, and is now, an ongoing effort to pass a "balanced budget amendment" in Indiana.
So, the real question is "what does this amendment ALLOW the state legislature to do that it cannot legally do now?" Let's take a look (the underlined portions are the proposed portions of the amendment which would be inserted into the Indiana constitution):
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.
OK, let's look at this:
(b)(1) defines what "revenue" is. Note that it specifically excludes "proceeds of bonds or other loans", and yet these proceeds ARE income to the state. In fact, they're specifically FOR income to the state. So the legislatures want permission NOT to consider this income as "revenue" when, in fact, it DOES constitute revenue. In effect, it now allows the state to say "Oh, look! We don't have enough money!" Which in turn sets them up to increase taxes and/or go into debt under Section 5 "casual deficits".
(c) says the state expense appropriations for a biennial budget can't exceed the estimated revenue of the state for that period. Well, they're ALREADY supposed to have a balanced budget, so why restate this? Oh...and don't forget, they redefined "revenue" and now they may be "short"...therefore increase taxes OR fall under the "casual deficits in the revenue" and then go into debt.
(d) talks about state funded pensions. What they're talking about here ALREADY falls under balanced budget concerns. Why must this be inserted? Except, potentially, to enable them to say "Oh, look! We're short on funds!" and here we go again.
(e) talks about expenses exceeding the actual revenue by the state at the close of the biennial budget period, the NEXT biennial budget must pay for it. Sounds good to me. Except for the fact that they redefined "revenue" and may now not be able to pay for those expenses...therefore coming under the "casual deficit" clause of Section 5.
(f) AH- HAH! HERE IT IS, THE MEAT AND POTATOES BURIED UNDER THE OTHER FLIM-FLAM! This says that the state can vote itself out of the requirements of (c) THE BALANCED BUDGET REQUIREMENT and (d) THE MAKING GOOD ON PAST BUDGET FAILURES. Note that the Indiana constitution currently makes NO ALLOWANCES for the state to do any such thing under Section 5!
(g) THIS part here deliberately HOBBLES the Indiana state supreme court from making the state General Assembly fiscally responsible for maintaining a balanced budget. It says that the General Assembly CANNOT be held legally responsible BY LAW. A declaratory judgement is no more than the court saying "you were/were not a bad boy", without any authority to direct an equitable remedy, which are injunctions or specific performance.
THIS IS THE DANGER DAD WARNED ME ABOUT.