The University of Hawaii’s controversial pharmacy school building tops the list of next year’s capital improvement priorities for the Abercrombie administration, the state’s budget director told lawmakers at a briefing last week.

Gov. Neil Abercrombie’s proposed budget includes $28 million in state-backed bonds for the Daniel K. Inouye College of Pharmacy building at UH-Hilo.

"I would probably classify the UH-Hilo pharmacy school as, if not the top priority CIP project, it’s one of the most foremost projects that’s reflected in the administration’s proposed budget," state Budget Director Kalbert Young said at a joint briefing called by the House and Senate committees on higher education.

In lobbying the Legislature for $38 million last session, pharmacy college officials and students said the school’s accreditation was at risk because it lacked adequate facilities. It operates from eight locations scattered around Hilo.

They ultimately were unable to persuade lawmakers to approve any funds. The Senate had supported the college in its draft of the current year’s budget, but House members refused to appropriate money for new building projects for the UH system until a backlog of repair and maintenance projects was confronted.

A team from the Accreditation Council for Pharmacy Education assessed the school’s qualifications in the summer and found it complying with all requirements except for a "physical facilities" standard.

UH-Hilo Chancellor Don Straney said the school needs to deal with the council’s concerns this school year to retain the ability to grant degrees.

He said UH-Hilo is not requesting any additional funds for operations next fiscal year, and is only seeking the reduced request for $28 million in bonds for the pharmacy building.

State Rep. Isaac Choy, chairman of the House Committee on Higher Education, asked whether the college could move into an existing facility, such as UH-Hilo’s new dormitory building.

"The facilities have to be appropriate to its function as a place for instruction," Straney said.

Choy asked whether the school will shut down without the building funds.

Straney said the college hasn’t started planning for that scenario. He said under formal accreditation rules, the school would need to continue offering courses to enrolled students until they finish their degrees, a process that would take three years.

Choy said it would behoove lawmakers to explore all options, and asked whether the pharmacy college would be better suited for Kakaako, near UH-Manoa’s medical school.

Straney said Hilo was chosen because officials at the time recognized a need to develop rural health-care expertise in a rural setting.

"It should remain in Hilo," he said.

He added that the pharmacy college has offices and classrooms in Kakaako, where students and faculty collaborate with the medical school.

Initial plans for the facility called for a $66 million, three-story building with 880,000 square feet of lab space. Straney said the price tag was reduced last year to $38 million by cutting out some of the lab space.

Now, he said, the designs call for a two-story "simple building."

Choy said afterward that he plans to introduce legislation that would require the pharmacy college be self-sustaining — using tuition, fees, donations and grants for operations — on a trial basis.

The college gets about 10 percent of its budget from state general funds.

"If it works, maybe we can look at applying it to the university’s other professional schools,"Choy said.