The state of Hawai'i is set to borrow more money as it tries to help the economy by increasing construction work.

It is going back to the bond market for the second time this year to boost borrowing for capital improvement projects. It plans to sell $619.4 million of general-obligation bonds in the next several weeks, $300 million of which will go to projects for the state Department of Education and the University of Hawai'i.

The latest bond issue follows a $427.2 million issue earlier this year and comes at a time when the Lingle Administration is trying to combat an economic slowdown that's resulted in lower tax revenues. The state Council on Revenues' most recent forecast indicated there will be a $900 million budget gap over the next three years.

Besides considering budget cuts, the administration is also planning to increase public works projects. Next month it intends to issue more bonds to pay for work on state airports and another issuance next year for work on harbors. Georgina Kawamura, state budget director, said the state has been criticized in past years for not being more aggressive with its borrowing for construction projects. She said the upcoming bond sale is also timed to take advantage of favorable market conditions.

She said the state typically issued $300 million to $400 million of bonds annually during the past five years for such work, but held back on issuing more, in part so it could use its borrowing capacity when times got tough.

Fitch Ratings, which has assigned an AA rating to the upcoming bond issue, has previously said the state's good bond ratings reflect its conservative budgeting practices, including maintaining adequate general and reserve fund balances.

Kawamura said she was pleased with the AA rating, which will reduce the state's interest costs.

"I think we've demonstrated an ability to respond and react when we get into financial situations," she said.

Besides the $300 million of general obligation bonds for capital improvement projects, the upcoming bond issue also includes $293.4 million of bonds to refinance outstanding bonds issued at higher interest rates.

Another $25 million of taxable bonds is being issued to help fund the acquisition of the Kukui Gardens housing project in Ho-nolulu. The purchase preserved 857 affordable rental units that could have been converted to market rate rental units.