Late this afternoon the House and Senate announced an agreement on the capital budget and the key policy issue that has prevented a budget to date – the state debt limit.

The 2011-13 biennial capital budget will be a capital budget with some limits to the debt capacity.

The key points of the agreement include:

• A smaller 2011-13 capital budget (approximately $1.1 billion) 
• Something will be placed into statute this year on a working debt limit but a constitutional amendment will not be sought at this time.
• The debt limit will be reduced over a period of time.
• A blue ribbon commission will be established (SB 5181) to study and recommend changes to the state’s debt capacity, with the authority to block bonds if its recommendations are ignored. The commission will include legislators, the state treasurer, OFM, and others with expertise on bonds and financing.

The actual budget for capital projects will come in two stages. The cash projects in the capital budget will appear in a striking amendment for SHB 1497.  In addition the Legislature will pass a striker to a second bill (HB 2020) which is the bond bill.

The capital budget is expected to be released some time tomorrow.