The state of Arizona has a huge deficit. It's now 30 percent of its entire budget. Obviously something needed to be done. Over at Neighborhood Effects, Mercatus Center's Eileen Norcross reports on the state's first step to address the problem:
After months of wrangling over how to meet the shortfall -- program cuts versus tax cuts -- a possible solution was reached this week, four weeks into the state’s new fiscal year: the lease of 32 government-owned properties including the State House, a prison, and a state hospital.Of course, the governor of Arizona, like every governor who has leased public property before (think Mitch Daniels in Indiana) is facing protests from voters. This makes no sense. Leasing the state's public property has proven to be the way to go. In Indiana, the state leased its highway, retained the ownership, and made a $4 billion profit. What's not to like? Norcross writes:
The plan involves selling the properties for a quick infusion of cash, and their leaseback over a period of years.
Does the state need to own a Coliseum and Exposition Center? Simply because it hosts the state fair doesn’t make it a state business.With a price tag of $84.3 million, privatization is a win-win situation. Take a non-essential, non-public good off the state’s books, and it has a chance of becoming a profitable (i.e., job-creating) business for a willing investor.Read the whole post here.
1 hour ago
I think leasing the State House isn't good from a PR perspective, but I agree with this in general. The company I work for sold our building and then leased it, and it kept us from having to lay people off, while the competition was dropping staff big time. Plus, throw in the free maintenance and it's a good idea when you have no money.
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