The release of the annual debt affordability report was former Washington State Treasurer James McIntire’s last act in office.

PHOENIX - Washington's state debt burden grew less than 1% in 2016, according to its annual Debt Affordability Study.

Outgoing Treasurer James McIntire released the study Jan. 10, the day he turned over the office to successor Duane Davidson.

Washington's debt stood at $20.9 billion at the end of 2016, an increase of less than 4% over the past three years.

"Debt is an important resource for funding major capital projects such as schools, universities, parks, roads, bridges and other public structures," said McIntire in a statement released with the study, "but it needs to be used sparingly."

The majority of the state's debt takes the form of general obligation bonds, which account for $11.6 billion, up from $11 billion at the end of 2012. Motor vehicle fuel tax bonds are the second-largest chunk, standing at $6.9 billion compared with $6.5 billion in 2012.

Debt payments will account for 6.2% of general fund state revenues in 2017, down from nearly 7% in 2010 after voters approved a lower constitutional debt limit championed by McIntire in 2012.

Debt payments for transportation projects will account for 40.5% of motor vehicle fuel tax revenues this year and rise in the future as construction starts on the transportation package enacted in 2015.

"We've done an excellent job managing our debt burdens through the Great Recession," said McIntire, who did not run for re-election after two terms. "We kept our AA+/Aa1 bond rating for the entire 8 years. We re-engineered how we issue bonds and forced Wall Street to be more competitive in bidding on our bonds, beating our benchmark for borrowing costs 16 out the 20 times we went to the market in the past eight years, versus nine out of 18 times in the prior eight years. The weighted average cost of funds on our GO portfolio is now 3.22%.

"Lowering our borrowing costs has saves Washington taxpayers billions of dollars that can be used for financing additional infrastructure," he continued. "Since taking office in 2009, we've refinanced $10.3 billion of debt at lower interest rates to save more than $1.1 billion, and we've financed $13.4 billion of new bonds at lower interest rates than expected when the Legislature approved the projects, saving another $2.2 billion."

McIntire in a letter accompanying the report warned that the state's revenues are not keeping pace with its need for new infrastructure. McIntire spent the final few months of his term pushing for new taxes to supplement existing revenues.

Davidson is Washington's first Republican treasurer since the 1950s.

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