State lawmakers would have less money to spend on building projects in flush years and more money to spend on everything else in lean years under a proposal that has bipartisan Senate support.
Sens. Derek Kilmer, D-Gig Harbor, and Linda Evans Parlette, R-Wenatchee, want to reduce the debt limit in the state constitution from 9 percent of state revenues down to 7 percent.
That would force lawmakers to borrow less money, reining in the growing amount they spend paying interest on debt — now approaching $2 billion, lawmakers said. Every dollar they don’t have to spend on debt service is a dollar they can add to education, social services and other programs.
But the bill would provide a safety valve by cranking the rate back up to 9 percent in years like this one when the economy is suffering. (It would use the same trigger as the one for the state’s rainy day fund.)
The idea is for the prescribed restraint in good years to open up some breathing room in borrowing capacity for tough years, so that the state can issue more bonds during a downturn and give a shot in the arm to an ailing construction industry.
Right now, Kilmer said, it looks like the 2011-13 bond budget will be between $700 and $800 million, less than a third of the size at its peak in 2007-09.
“It’s cheap to build,” he said, “and yet the state doesn’t have any capacity to make investments.”