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November 9, 2010 - In a previous analysis, we pointed out that the sale-leaseback of state buildings authorized in 2009 legislation was poor fiscal policy and represented one imperfect option among many for balancing the state’s budget. Mainly due to changes in the interpretation of property tax assessments, our forecast of the cost of the sale-leaseback is approximately $800 million greater than our previous analysis. The Legislature may wish to consider whether this increase in costs merits changing course.
October 6, 2010 - Presented to the Conference Committee on the Budget
September 29, 2010 - Presented to Joint Hearing of Senate and Assembly Committees on Revenue and Taxation
September 28, 2010 - Presented to Joint Hearing of Senate Committee on Elections, Reapportionment, and Constitutional Amendments and Assembly Committee on Elections and Redistricting
April 27, 2010 -
Recent legislation authorized the Department of General Services (DGS) to sell and then lease back 11 state-owned office properties. The sale-leaseback is designed to free up the state’s equity in the buildings to provide one-time revenue for addressing the state’s current budgetary shortfall. We estimate that the sale of buildings would result in one-time revenue to the state of between $600 million and $1.4 billion, but that annual leasing costs would eventually exceed ownership costs by approximately $200 million.
Over the lives of these buildings, we estimate the transaction would cost the state between $600 million and $1.5 billion. The Legislature will need to weigh how these costs compare to other alternatives for addressing the state’s budget shortfall. In our view, taking on long-term obligations—like the lease payments on these buildings—in exchange for one-time revenue to pay for current services is bad budgeting practice as it simply shifts costs to future years. Therefore, we encourage the Legislature to strongly consider other budget alternatives.
(Short video introducing this report)
February 19, 2010 - A presentation on California's budget, economic outlook, and education funding. Presented at the California County Superintendents Educational Services Association Chief Business Officials Conference in Sacramento on February 19, 2010.
February 9, 2010 - Presented to: Senate Governmental Organization Committee Hon. Roderick Wright, Chair
December 14, 2009 - Presented to the Assembly Budget Committee on December 14, 2009
September 23, 2009 - Presented to Assembly Committee on Accountability and Administrative Review
August 18, 2009 - Presented to joint hearing of Senate Elections, Reapportionment and Constitutional Reform and Senate Select Committee on Constitutional Reform
June 12, 2009 - Presented to Budget Conference Committee
June 11, 2009 - Presented to Budget Conference Committee
June 3, 2009 - Presented to Budget Conference Committee
May 22, 2009 - Presented to Budget Conference Committee
May 12, 2009 - Author Greg Jolivette summarizes the findings of our recent report, Department of Real Estate: Opportunities to Improve Consumer Protection, in a three and one-half minute video.