The Legislature just went to the highest bidders...

Now if they demolished the prisons instead of selling them, think of how much money we'd save.

Thanks to Ken Kopczynski of Private Corrections Institute for this article: finally the details on the state property sales. I'd like to see what investors are lining up early for those prisons...I'm sure there's a way to find out. 


I'll find out and get back with folks. If you beat me to it, please post it for everyone else.

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Ariz. refinancing state property to balance budget

By PAUL DAVENPORT
Monday, September 14, 2009
AZ Daily Sun

Faced with a state budget crisis that won't quit, Arizona lawmakers are offering to sell legislative buildings, prisons and other facilities that the state would then lease back, effectively taking out a mortgage on paid-for state property.

The plan signed by Gov. Jan Brewer two months into the new fiscal year as part of a budget package will put a combination of prisons and other facilities up for sale to raise $735 million. Included in the list are the executive office tower housing the governor's office and the state police headquarters. The $8.7 billion spending plan closed most of a $3.2 billion revenue shortfall with a combination of spending cuts, borrowing, use of federal stimulus money and a variety of budget-balancing maneuvers.

The state would continue to use the facilities and get ownership of them back after up to 20 years of paying lease payments.

A separate budget-balancing provision would sell one or more state prisons outright to raise $100 million.

California lawmakers also approved state asset sales in July, authorizing the sale of 17 state office buildings to raise cash and renting the space back from the new landlord. The Orange County Fairgrounds also will go on the market. The sale could raise hundreds of millions of dollars, according to the state.

Todd Haggerty, a National Conference of State Legislatures analyst, said it's not surprising that Arizona would resort to the lease-purchase sales.

Arizona's budget morass is among the worst in the nation, with revenue dropping nearly 30 percent between the 2007-2008 budget year and this year.


"A lot of states are looking at three, four or even five years (of shortfalls)," Haggerty said. "Anything and everything is on the table."

The refinancing breaks new ground for the state and an implementation plan is still being developed, said Alan Ecker, a Department of Administration spokesman.

Other properties listed as candidates for sale-leaseback deals include 10 prison complexes, the House and Senate buildings, a new archives building, the state mental hospital, a veterans care home and even the gem of the state parks system, a cave known as the Kartchner Caverns.

The copper-domed Old Capitol, now the home of a museum, isn't on the list.

"These are solid, safe investments," said House Appropriations Chairman John Kavanagh, R-Fountain Hills. "I think investors are going to jump on them."

Republican legislators in Arizona in recent years tried to fend off then-Gov. Janet Napolitano's proposals to borrow money to prop up spending in the face of the collapse of the state's growth-reliant housing industry. But GOP leaders this year decided that refinancing state buildings and other forms of borrowing are a lesser evil than tax increases such as those proposed by Brewer and her counterparts in other states.

A Federal Reserve survey released on Sept. 9 was seen as evidence that the recession is over nationally, but Arizona is among 24 states already projecting shortfalls for their 2011 fiscal years.

It could take several years for many states' budgets to recover from the recession, Haggerty said.

With high unemployment contributing to demand for state services, "the states definitely have a lag factor," he said.

Brewer said she hasn't given up on her proposal to boost the state's sales tax and wants lawmakers to consider it anew when they report in January for their 2010 regular session and resume budget work.

"A lot of the one-time solutions simply aren't going to be there," said Eileen Klein, Brewer's top budget adviser.

Before legislators begin work on the next budget _ one also expected to have a shortfall of up to $3 billion _ they will have to finish off the current one.

While Brewer signed most of a budget-balancing package into law on Sept. 4, she vetoed some spending cuts and other provisions designed to save $464 million. That and a $500 million deficit left over from the previous budget add up to a nearly $1 billion shortfall that needs to be closed.

The budget action means the state now can pay its bills in the next few months with its reduced tax collections, stimulus money and continued borrowing from special state funds, Treasurer Dean Martin said.

"We're out of the woods," Martin said. "Cross your fingers, cross your toes."

Associated Press writer Judy Lin in Sacramento, Calif., contributed to this report.