This morning the Washington House passed a series of bills that together will implement the capital budget for the 2011-13 biennium.
State Debt Limit
With a vote of 79-14 the House passed legislation to reduce the state debt limit. Senate Bill 5181 requires the State Finance Committee to recommend a working debt limit for purposes of budget development for capital bond appropriations that is lower than the constitutional debt limit. The working debt limit must be updated periodically following the Economic and Revenue Forecast Council’s forecasts, and may be modified in response to extraordinary economic conditions.
The State Finance Committee must recommend the following working debt limits:
- 8.5 percent for the 2015-2017 biennium
- 8.25 percent for the 2017-2019 biennium;
- 8 percent for the 2019-2021 biennium; and
- 7.75 percent for the 2021-2023 biennium and thereafter.
The State Finance Committee may reduce or delay the issuance of bonds if an issuance would result in exceeding the recommended working debt limit. Finally, the Governor and the Legislature must develop capital bond budgets within the recommended working debt limit.
In addition the bill creates a Commission on State Debt to assist the Legislature in examining the kinds of debt incurred by the state, and the limits on the amount and use of debt.
The twelve-member Commission is chaired by the State Treasurer, and also includes the Director of the Office of Financial Management, four legislative members, and six independent members.
With a vote of 84-10, the House passed legislation (HB 2020) to provide $1.4 billion in new state general obligation bonds to support the 2011 Supplemental and 2011-13 Capital Budget. In addition the bill reduces 2011 Supplemental bond appropriations by $32 million.
With a vote of 94-0, the House passed the 2011-13 capital budget (HB 1497). The 2011-13 Capital Budget authorizes $3.1 billion in new capital projects, of which $1.4 billion are financed with new state general obligation bonds.
It is the combination of HB 1497 and HB 2020 that will provide the funds to support Evergreen’s capital projects.
All three bills now go to the Senate for further consideration.