HARRISBURG — Pennsylvania’s state treasurer said Thursday he would sign off on a $650 million bond issue, forcing outgoing Gov. Ed Rendell to accept a smaller amount of borrowing to keep money flowing to construction projects like hospitals and bridges after the state’s auditor general refused to go along.

Money for the projects will run out sooner than a $1 billion bond issue championed by Rendell, who had sought approval for it over the last several weeks from fellow Democrats, Treasurer Rob McCord and Auditor General Jack Wagner.

But McCord and Wagner disagreed with Rendell’s assertion that interest rates are favorable now, and McCord said the compromise he forced will save taxpayer money by forgoing needless interest payments.

The wariness by McCord and Wagner comes at a time when the man replacing Rendell is facing a $4 billion-plus state budget deficit projected for next year.

“Whether it was real or perception, we did not want to leave either the Corbett administration or the public with the impression that we were enabling a process where anybody was sort of engaged in a dash for cash,” McCord told reporters at a news conference in his Capitol office.