Waste Watcher: Still Surplus After All These Years

Back in May 2004, Gov. Arnold Schwarzenegger ordered state agencies to expedite the sale of an estimated $5 billion in surplus state properties. It was an ambitious plan designed to help the state raise money it badly needed.

That November, voters backed the governor with Proposition 60A, directing proceeds from the sale of those properties be used to pay down deficit bonds. Now, four years later, the state has yet to sell off most of the targeted surplus properties, according to the Los Angeles Daily News (April 8th).

The state Finance Department indicates that the state sold off no surplus property in the 2004. And while property sales climbed to $12.9 million in 2005-06, they fell to just $1.4 million in 2006-07.

Beth Mills, spokeswoman for the Department of General Services that handles surplus state land sales, said that during the current 2007-08 fiscal year, the state is expecting to take in $31.7 million from two sales.

“‘About $21 million is a payment the state is receiving from the sale of Agnews Development Center in San Jose, for a parcel the state sold to Rivermark – Centex, ‘Lennar and Shea Homes – in 2004,’” Mills said.

The Little Hoover Commission, the Legislative Analyst’s Office, and the State Auditor’s Office –state watchdog agencies-- have said there is little incentive for state departments to declare any of their properties surplus since the departments don’t receive the proceeds.

In response, “Republican lawmakers and taxpayer groups said new tactics need to be used if there is to be any change” toward unloading its junk property.

One state property currently over-subsidized by taxpayers is the Los Angeles Coliseum. Senator Jeff Denham (R-Merced) has proposed legislation to rescind the Los Angeles Memorial Coliseum Commission and the joint powers agreement between the state, the City of Los Angeles and Los Angeles County. The commission’s ineffective oversight and local infighting have caused the Los Angeles Coliseum to fall into disrepair, resulting in the loss of several major tenants. As a result, state taxpayers are not receiving much in return for their tax support of the Coliseum. This is just one example where the state could recoup over $2 billion from a state-owned property currently costing taxpayers more to maintain than it produces.

As the budget battle heats up and tax increases are proposed to obliterate the deficit, we have to tap resources we have on-hand to produce revenue without taking more and more money from taxpayers. Selling surplus state property is a no-brainer in that respect. If we don’t need it, or if the state can’t manage it profitably, it should be sold to someone who can.

Apparently, we are still crazy after all these years since the state still has a house full of junk that needs to go! Maybe we should consult E-Bay about auctioning off our unused junk…at least they could produce some badly needed cash with it.