Governor’s plan to sell state buildings would cost a bundle, report says
The state’s plan to make some quick cash by selling office buildings and other properties and leasing them back would cost taxpayers a bundle over the long haul, according to a new state report.
The nonpartisan Legislative Analyst’s Office said Tuesday that selling structures, including the Ronald Reagan State Building in downtown Los Angeles, to help close a budget shortfall would eventually cost the state money -- about $200 million a year.
The report called the proposal “bad budgeting practice” and “poor fiscal policy.”
Gov. Arnold Schwarzenegger has proposed selling 24 buildings to pay down $598 million of the state’s roughly $20-billion general fund deficit. Investors began bidding on the buildings last week. The governor has removed critics of the plan from state building commissions that would oversee the transactions.
The Assembly called a hearing on the sale idea Wednesday.
Schwarzenegger defended the plan last week, saying he was “not crazy and doing a fire sale.”
“I can guarantee you that I will never sell state property if it doesn’t make any sense from an investment point of view,” he said.
The legislative analyst’s report said that if the properties could fetch the state closer to $1.4 billion, rather than the $598 million the governor’s office has estimated, it would be “one imperfect option among many.”
The report urged rejection of the sale if the properties bring in the lesser sum.