INDIANAPOLIS — A national credit rating agency is praising the ratification of a balanced budget amendment to the Indiana Constitution by Hoosier voters Tuesday as a prudent financial decision.
Moody's Investors Service deemed Indiana's new constitutional balanced budget mandate as "credit positive" in its Weekly Credit Outlook, which regularly reviews policy decisions that impact state and national government finance.
It was the only state finance-related ballot measure to earn a "positive" indication from Moody's in its post-election roundup.
The agency issued "negative" reviews to successful Arizona, Connecticut, Florida, Maryland and North Carolina initiatives that reduced legislative or executive flexibility to raise or manage revenue.
The Indiana amendment mandates state lawmakers approve a balanced budget that fully funds Indiana's pre-paid pension obligations, unless two-thirds of both the House and Senate agree that a fiscal emergency requires state spending in excess of tax collections.
While Moody's acknowledged that "Indiana has effectively operated with balanced budgets" in recent decades, it also noted that Indiana no longer will stand with Arizona, Vermont and Virginia as the only states lacking an explicit balanced budget requirement.
Preliminary election results show the balanced budget amendment was approved by approximately 72 percent of Indiana voters, after twice winning near-unanimous support in the Republican-controlled General Assembly.
The new constitutional language likely will not change Indiana's credit rating, since it already is the highest possible at "AAA" from all three major credit rating agencies.