Arizona sells buildings to plug deficit
TEXT OF STORY
Bill Radke: This month, America’s governors are making their State of the State addresses. Generally, the news isn’t good. A new study by the Nelson A. Rockefeller Institute of Government finds state tax revenues fell last year by record amounts. Arizona is one of those states getting creative about raising money, as Brett Neely reports.
Brett Neely: The State of Arizona is selling some of its best assets. But it doesn’t want to call this a sale.
Alan Ecker is a state spokesman:
Alan Ecker: Yeah, it’s really a financial mechanism is what it is.
The state is selling buildings to investors to raise $735 million to plug the budget deficit.
Ecker: Buildings like the legislative buildings, the House and Senate, the State Capitol Executive Tower.
These are buildings the state will always need. That’s why investors are interested. Arizona will pay them to lease the buildings back for 20 years. It’s a tried and true financial tactic for cash-strapped companies, but not as common for states.
Scott Pattison runs the National Association of State Budget Officers. He says low tax revenues and more social spending means many states won’t be out of the woods for awhile.
Scott Pattison: So we’re looking at another 18 months, perhaps two years, of very difficult fiscal times for states.
And he says more states may be tempted to mortgage their buildings like Arizona has done.
I’m Brett Neely for Marketplace.
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