OLYMPIA – The state’s $2.8 billion Capital Budget will include $35 million to start construction on a new medical school in Spokane.
Legislative leaders announced Tuesday afternoon they have reached agreement on the Capital Budget and a contentious side issue involving limits to the amount of debt the state can take on.
The list of projects that will be covered by some $1.1 billion in bonds won’t be released until sometime this morning, but Senate Majority Leader Lisa Brown confirmed the Washington State University Spokane Riverpoint Biomedical and Health Services Facility will be on that list.
“The pieces are coming together,” Brown, D-Spokane, said.
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It will receive $35 million in the first year of the 2011-13 biennium. That’s a major shift in fortunes for the project, which was left out of Gov. Chris Gregoire’s original proposal in December and at one point was slated for funding in the second year of the biennium.
The universities, led by WSU President Elson Floyd made a strong pitch for the project, and it received support from Sen. Derek Kilmer, D-Gig Harbor, the chairman of the Capital Budget Committee, Brown said.  “The Spokane community really pulled out the stops in coming over to Olympia and pointing out the long-term benefits, not just for Spokane but the whole state.”
The total cost of the project is estimated to be $70 million. University officials and community leaders will have a chance to lobby for the second half of the funding next year, when the state may have more ability to sell bonds if the economy recovers.
The amount of debt the state can take on was a major sticking point in negotiations between the Senate and the House over the Capital Budget.
Bonds are sold to pay for the projects, but they are paid off from the operating budget and the amount of debt the state can have is tied to state revenue. The Senate had proposed a constitutional amendment to lower the debt limit from 9 percent to 7 percent; House Democrats had countered with lowering it to 8 percent.
To end the stalemate, the Legislature will create a special commission to study all state debt, report back and educate the public on the impact it has on other budgets. It will also give the state Finance Committee, which determines the timing of bond sales, more authority to refuse the sales if the debt grows too large.
 

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