State Constitutional Balanced Budget Provisions

Here is question that popped up in the paper that I’m currently drafting.  Suppose that a state has a balanced budget rule in its constitution.  And then an unbalanced budget is enacted.  What happens?  In other words, are there any state courts that have intervened to stop spending or raise taxes in that scenario?  Or is it just that politicians who violate the constitutional requirement get criticized by voters or other politicians?

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6 Responses

  1. Dan Cole says:

    Perhaps they just do like all other states with balanced-budget amendments: rely on the federal government to pick up the tab.

  2. Scott Bauries says:

    Guinn v. Legislature, a Nevada Supreme Court case, ordered the Legislature to pass a tax increase by simple majority (even though a recent state constitutional amendment had set a 2/3 majority requirement) because the Legislature had, earlier that same year, passed a budget by simple majority (as was permitted by the state constitution), but could not achieve the super-majority required for the tax increases necessary to fund the enacted budget. It was the balanced budget requirement of the state constitution that made the tax increase necessary, but it was the state constituion’s education clause that justified the court’s ruling. The court held that the more “substantive” duty to fully fund the education budget controlled the more “procedural” super-majority requirement where the two conflicted. I guess this was a case about the enactment of an unbalanced budget, and Governor Guinn was the plaintiff. Fun fact, though: at least one justice (and maybe as many as three–sorry, writing this from memory) was replaced in the next election cycle as a direct result of the decision. It all happened within the last decade.

  3. Todd Klimson says:

    Defn of Balanced Budget: Don’t worry about it Fitch will still rate you AAA.

  4. Norman Williams says:

    Many, if not most, of the state constitutional provisions are bans or limitations on the issuance of state debt. The balanced budget requirement is simply the collateral consequence of the inability of the state to fund deficits by debt. This is a prime example of an area of (state) constitutional law in which courts play a peripheral-to-non-existent role.

  5. PrometheeFeu says:

    Who would have standing to challenge such a budget?

  6. Joe says:

    “Who would have standing to challenge such a budget?”

    Almost any taxpayer in almost every state. All fifty states have some version of state taxpayer standing, though some add on odd additional requirements. Connecticut, for example, requires a showing that the plaintiff’s taxes would actually be affected by the challenged government expenditure or other fiscal activity. Alaska requires a showing that there is a substantial public interest at stake.

    Lawyers always think that it’s odd that their particular state allows taxpayer standing when they encounter that situation, but really, it’s the federal anti-taxpayer standing rule that’s the outlier. Sunstein long ago argued that this was an attempt by Frankfurter et al to preserve New Deal spending programs.

    Other more recent commentators argue that there is a distict link between state taxpayer standing rules and state constitutional fiscal limitations — i.e., that the law in these states evolved to permit taxpayer standing because the state constitutions have all of these weird debt and spending limitations that otherwise would be unenforceable, at least in the courts. Hershkoff was (I think) the first of these in her EXCELLENT 2001 HLR article. Others have echoed that.

    But are they right? The theory can be tested, after all. Law review articles editors: You’ll get my answer sometime in February.