SAN FRANCISCO — Washington State lawmakers have passed a budget that closed an almost $5 billion hole for the upcoming two fiscal years and includes a compromise on reducing the debt limit.

The budget, passed at the end of May, closed a projected $4.9 billion deficit in a $32 billion budget for the fiscal 2012-13 biennium. It still needs Gov. Chris Gregoire’s signature.

Treasurer James McIntire said the budget and the compromise on the debt limit demonstrated “remarkable” bipartisanship.

“It was very unlike sessions we have seen in other states where there is a lot of partisan rancor,” McIntire said. “Once you take away taxes and cut so much, there isn’t much to disagree about.”

McIntire is a Democrat, as are Gregoire and the majorities in both houses of the Legislature.

But voters effectively took taxes off the table last November, when they rejected an income tax on the wealthy and raised the threshold to two-thirds for the Legislature to increase future taxes.

The Legislature has also been through two previous cycles of budget cuts.

Instead of moving forward on a constitutional amendment McIntire proposed to reduce the state debt limit to 7% from 9% while smoothing its volatility, the Legislature compromised on a statutory measure. It also formed a commission to make policy recommendations on a possible change to the state’s constitution.

“Currently, the debt limit is calculated on a three-year moving average and during the construction boom time the limit went up considerably; during the last three years, it dropped precipitously,” McIntire said. “We are right up against it for this upcoming biennium.”

The new statute directs the state finance committee to push the debt limit down to 7.75% by 2021.

Washington’s debt limit applies to the state’s general-purpose general obligation bonds, though GOs with a dedicated repayment source, such as those backed by motor vehicle fuel taxes, are not subject to the limit.

McIntire said the debt limit and the other fiscal measures may lead to a better rating in the long term but in the end it likely depends on revenue growth.

In any case, there’s not much room to rise — Washington GOs already carry double-A-plus ratings across the board.

Standard & Poor’s gave a thumbs-up to the move to curb debt levels.

“Given that Washington’s debt levels are somewhat higher than other states, we believe steps to contain the growth of its debt burden could have favorable implications to the state’s credit,” the agency said in a report Tuesday.

Moody’s Investors Service said in a February report that a reduction of Washington’s debt ratios closer to the agency’s 50-state median could add to the chance of an upgrade.

The state’s maximum annual debt service on all outstanding debt subject to the constitutional debt limit was $974 million, or 8.03% of the average of the previous three years’ general revenue, as of August, according to the treasurer’s debt affordability study, which was released in January.

The study said the state’s current debt service will peak at more than $1.4 billion from 2017 to 2019 and then continue falling through 2041.

Washington had $10.4 billion of general-purpose bonds and $6.2 billion of motor vehicle fuel tax GOs outstanding as of June 30. Outstanding state certificates of participation totaled $742 million as of the end of the fiscal 2010.

Moody’s rates the state’s COPs Aa2 and Standard and Poor’s rates them an equivalent AA.

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