CHICAGO — Wisconsin Gov. Scott Walker has proposed a $1.12 billion capital budget for the next two-year budget cycle, down sharply from the $1.6 billion plan adopted two years ago.

The budget relies on a total of $720 million of borrowing, including $348 million of general fund-supported bonding, down from $504 million in the last capital budget. Another $304 million would be supported by program revenues.

“Our capital budget aggressively uses the funds available to us to maintain state buildings, plan for growth, and most importantly, create jobs,” Walker said.

The State Building Commission must adopt the plan. It then goes before the Legislature, which also must adopt a new two-year operating budget for the fiscal biennium beginning July 1.

The University of Wisconsin system would receive $273 million in funding for various building projects. Energy conservation projects would receive $100 million. One notable project absent from the list is funding for improvements at the Bradley Center in Milwaukee, home of the National Basketball Association’s Milwaukee Bucks.

The operating budget, separately, includes authority to sell $1.4 billion of new debt, said capital finance director Frank Hoadley. General obligation bonds make up about half of the authority at $732 million, with transportation revenue bonding representing $342 million and clean-water bonding accounting for $353 million.

The GO authority includes the restructuring of $364 million of debt service due in fiscal 2012 for budget relief. The budget anticipates the sale of $800 million of operating notes for cash-flow purposes in each of the next fiscal years.

The political unrest and protests that hit the state when Senate Democrats fled the state in an attempt to prevent a vote on Walker’s budget repair bill that gutted the collective bargaining rights of most public unions eased this week. But battles loom over the Republican governor’s proposed operating budget. Various lawmakers also face recall efforts due to their action on the budget repair bill, and the law faces legal challenges.

Walker on Friday signed a revised budget-repair bill that curbs collective bargaining rights and increases public employee pension contributions and health care premiums. The pension and health care measures are expected to save $30 million in the current budget and $300 million in the next budget. The state rescinded layoff notices after Walker signed the package.

“The reforms contained in this legislation, which require modest health care and pension contributions from all public employees, will help put Wisconsin on a path to fiscal sustainability,” Walker said in a statement.

Senate Democrats stalled the Republican majority’s passage of the legislation by fleeing the state, leaving the Senate one member short of the special majority needed to establish a quorum. Republicans got around that requirement last week by stripping from the bill its fiscal elements — including a $165 million debt restructuring — that triggered the need for a larger majority to establish a quorum. The Legislature must vote on the debt restructuring by early April to allow the state time to issue the refunding bonds to erase a current-year budget shortfall.

Several legal complaints have been filed, including one by Dane County officials challenging passage of the law because lawmakers provided little notice of a legislative hearing last week on the revamped bill. The lawsuit also contends the Senate needed more members present for a vote. A Dane County judge refused to issue a temporary restraining order blocking the law but a hearing on the lawsuit is scheduled for Friday.

Walker has said the controversial collective bargaining curbs are needed to offset the impact of $1.25 billion in cuts to local governments and schools in his $59 billion 2012-2013 budget. He has insisted that the curbs could save $1.5 billion. Walker’s spending plan primarily relies on spending cuts to deal with a $3.6 billion deficit.

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