Call it junk food budgeting – binge now, pay later.
According to a report by the state legislative analyst, the latest critic of pending efforts sell two dozen state office buildings – including the Judge Joseph A. Rattigan Building in Santa Rosa – and lease them back, the maneuver will cost taxpayers as much as $1.5 billion over the next 20 years.
The estimate released Tuesday is similar to calculations by the sales agent that were reviewed by the Associated Press and became the basis for an April 19 editorial in The Press Democrat.
Legislative Analyst Mac Taylor’s report notes that the state would be selling its buildings in a depressed market. For the same reason, the report notes, the state might benefit from lower lease payments. Still, in the long-term, this deal looks like a loser.
While it estimated the state could net $600 million to $1.4 billion after paying off outstanding debt, producing cash to ease the current budget crunch, the lease-back costs would exceed any short-term gains, and the gap would become larger with the length of the leases.
A decision on the sales could come by the end of May.
– Jim Sweeney